KraneShares SSE STAR Market 50 Index ETF (KSTR)

Overview

The KraneShares SSE STAR Market 50 Index ETF (KSTR) aims to track the performance of the SSE STAR Market 50 Index, which comprises the 50 largest and most liquid companies listed on the Shanghai Stock Exchange's Sci-Tech Innovation Board (STAR Market). The STAR Market is designed to foster innovation and attract high-growth technology and strategic emerging industry companies. KSTR provides investors with exposure to leading Chinese technology and innovation companies. Its investment strategy is passive, aiming to replicate the index's holdings.

Reputation and Reliability

KraneShares is a reputable ETF issuer known for its focus on China-focused investment strategies. They have a track record of launching ETFs that provide access to specific segments of the Chinese economy and capital markets.

Management Expertise

KraneShares employs experienced investment professionals with deep knowledge of the Chinese markets and ETF management. Their expertise is crucial in accurately tracking the targeted index and navigating the complexities of the Chinese securities market.

Goal

To provide investors with a cost-effective way to gain exposure to the performance of the 50 largest and most liquid companies listed on the Shanghai Stock Exchange's Sci-Tech Innovation Board (STAR Market).

Investment Approach and Strategy

Strategy: The ETF employs a passive investment strategy, aiming to replicate the performance of the SSE STAR Market 50 Index through a representative sampling or full replication approach.

Composition The ETF primarily holds equities of companies listed on the STAR Market. These companies are typically in sectors like advanced information technology, high-end equipment, new materials, new energy, and biomedicine, reflecting China's strategic focus on technological innovation and industrial upgrade.

Market Share: Specific market share data for individual ETFs within niche segments like the STAR Market is often not publicly detailed. However, as a dedicated ETF for this specific index, KSTR likely holds a significant portion of the market for direct exposure to the SSE STAR Market 50 Index.

Total Net Assets (AUM): 347484000

Key Competitors

• SSE STAR Market 50 Index ETF (China-based ETFs tracking the same index)

Competitive Landscape

The competitive landscape for ETFs tracking the SSE STAR Market 50 Index primarily consists of other ETFs, both within and outside the US, that aim to replicate this specific index. KraneShares' advantage lies in its established presence and focus on China-specific ETFs, offering investors a familiar and accessible route. However, direct competition from China-domiciled ETFs could pose a challenge in terms of expense ratios or specific market access. KSTR's disadvantage might be its reliance on the performance of a relatively new and evolving market segment.

Historical Performance: Historical performance data for KSTR and its underlying index shows variability, influenced by the performance of China's technology and innovation sectors. Investors should consult up-to-date financial reports for specific year-over-year and cumulative returns.

Benchmark Comparison: The ETF aims to track the SSE STAR Market 50 Index. Its performance is expected to closely mirror the benchmark, with minor deviations due to tracking differences and expense ratios.

Expense Ratio: 0.76

Average Trading Volume

The average trading volume for KSTR is sufficient to allow for efficient trading, though it may be lower compared to broader market ETFs.

Bid-Ask Spread

The bid-ask spread for KSTR is generally competitive, reflecting the liquidity of the underlying STAR Market securities and the ETF's structure.

Market Environment Factors

The performance of KSTR is significantly influenced by China's economic growth, government policies supporting technological innovation, global trade relations, and investor sentiment towards emerging markets and technology stocks. The STAR Market is particularly sensitive to regulatory changes and advancements in key technology sectors.

Growth Trajectory

The STAR Market is a relatively new and rapidly developing segment of the Chinese stock market. Companies listed on this board are generally high-growth, innovation-driven entities. The ETF's growth trajectory will be tied to the success and expansion of these companies and the continued development of the STAR Market as a hub for technological advancement in China.

Competitive Edge

KSTR offers a unique and targeted exposure to China's cutting-edge technology and innovation companies through the SSE STAR Market 50 Index. Its specialization provides a distinct advantage for investors seeking to capitalize on China's strategic push into high-tech industries. KraneShares' established expertise in China-focused ETFs also contributes to its reliability and investor confidence. The ETF's focus on a specific, high-growth segment of the Chinese market differentiates it from broader China equity ETFs.

Volatility

The ETF is expected to exhibit higher volatility compared to broad-market ETFs due to the concentration in technology and emerging companies on the STAR Market, which are inherently more sensitive to market shifts and economic cycles.

Market Risk

Key market risks include regulatory changes in China impacting technology companies, geopolitical tensions affecting global trade, fluctuations in global equity markets, and the specific performance risks associated with the technology and innovation sectors, as well as currency risk associated with USD-denominated investments in CNY-denominated assets.

Ideal Investor Profile

The ideal investor for KSTR is one with a high-risk tolerance, a long-term investment horizon, and a specific interest in gaining exposure to China's technology and innovation sector. Investors should understand the unique characteristics and risks associated with the STAR Market and emerging market equities.

Market Risk

KSTR is best suited for long-term investors who are seeking growth opportunities in China's technology sector and are comfortable with the higher volatility and specific risks associated with this niche market. It is less suitable for risk-averse investors or those seeking immediate income.

The KraneShares SSE STAR Market 50 Index ETF (KSTR) offers targeted exposure to China's leading technology and innovation companies listed on the Shanghai Stock Exchange's STAR Market. As a passive ETF, it aims to track the SSE STAR Market 50 Index, providing investors with access to a curated basket of high-growth companies. While KSTR presents a unique opportunity to invest in China's technological advancement, investors should be aware of its higher volatility and the specific risks associated with emerging markets and the technology sector.

Data Sources:

• KraneShares Official Website
• Financial Data Providers (e.g., Bloomberg, Morningstar)
• Shanghai Stock Exchange (SSE)

Disclaimers:

This information is for educational purposes only and does not constitute investment advice. Investment decisions should be made based on individual financial circumstances and consultation with a qualified financial advisor. Past performance is not indicative of future results.