KraneShares Hang Seng TECH Index ETF (KTEC)

ETF KraneShares Hang Seng TECH Index ETF (KWEB) Summary

Profile:

KWEB is an ETF that tracks the Hang Seng TECH Index, which comprises the 30 largest technology companies listed in Hong Kong. This ETF provides investors with diversified exposure to the Chinese technology sector, focusing on large-cap growth companies.

Objective:

The primary objective of KWEB is to track the performance of the Hang Seng TECH Index, offering investors returns that closely mirror the index.

Issuer:

KraneShares is an asset management firm specializing in China-focused Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs).

• Reputation & Reliability: KraneShares has a solid reputation in the industry, with over $10 billion in assets under management.

• Management: The firm boasts a strong team of professionals with extensive experience in investing and managing Chinese assets.

Market Share & AUM:

KWEB holds a significant portion of the market share within its sector, with over $6.3 billion in total net assets as of October 26, 2023.

Moat:

KWEB benefits from its:

• Unique focus: Targeting the Chinese technology sector offers exposure to a rapidly growing and dynamic industry.

• Efficient diversification: The fund provides diversified exposure to 30 leading technology companies, mitigating single-stock risks.

Financial Performance:

KWEB has demonstrated strong historical performance, outperforming the broader market in recent years.

• Benchmark Comparison: KWEB has consistently outperformed the Hang Seng Index, its benchmark, indicating its effectiveness in tracking the tech sector's growth.

Growth Trajectory:

The Chinese technology sector is expected to continue experiencing solid growth, driven by factors like innovation, government support, and increasing internet penetration. This bodes well for KWEB's future prospects.

Liquidity:

KWEB enjoys high liquidity, reflected in its:

• Average Trading Volume: The ETF experiences a significant daily trading volume, making it easy to buy or sell shares.

• Bid-Ask Spread: The bid-ask spread remains tight, indicating low transaction costs.

Market Dynamics:

The ETF's market environment is influenced by:

• Economic Indicators: China's economic growth and regulatory policies significantly impact the technology sector.
• Sector Growth Prospects: The continued advancement of technology and its integration into various industries drive sector growth.
• Current market conditions: Global economic trends and investor sentiment can affect the tech sector's performance.

Key Competitors:

• Invesco Golden Dragon China ETF (PGJ)
• iShares China Large-Cap ETF (FXI)
• Xtrackers CSI 300 China A-Shares ETF (ASHR)

Expense Ratio:

KWEB's expense ratio is 0.69%, which is relatively low compared to other thematic ETFs.

Investment Approach and Strategy:

KWEB employs a passive management approach, replicating the Hang Seng TECH Index composition. The ETF primarily invests in:

• Stocks: KWEB holds shares of the 30 companies included in the Hang Seng TECH Index.

Key Points:

• Exposure to the booming Chinese Tech sector: Provides investors access to China's rapidly growing technology industry.
• Strong track record and competitive edge: Outperforms benchmark and offers a low expense ratio.
• Liquidity and diversification: Offers high liquidity and diversified exposure to minimize risk.

Risks:

• Market Volatility: The technology sector is susceptible to market fluctuations, which can lead to significant price swings.
• Geopolitical Risks: Changes in China's regulatory landscape or political environment can impact the ETF's performance.
• Concentration Risk: Despite diversification, KWEB's holdings are concentrated in the technology sector, making it vulnerable to sector-specific downturns.