KraneShares Hang Seng TECH Index ETF (KTEC)KTEC

KraneShares Hang Seng TECH Index ETF (KTEC) Overview

Profile

The KraneShares Hang Seng TECH Index ETF (KTEC) is a passively managed exchange-traded fund that tracks the Hang Seng TECH Index. This index comprises the 30 largest technology companies listed on the Hong Kong Stock Exchange. KTEC provides investors with exposure to the growth potential of the Chinese technology sector.

Objective

The primary objective of KTEC is to provide investment results that, before expenses, generally correspond to the price and yield performance of the Hang Seng TECH Index.

Issuer

KraneShares is a privately held investment management firm specializing in thematic ETFs focused on China. It was founded in 2013 and is headquartered in New York City. KraneShares has a strong reputation for its expertise in the Chinese market and its commitment to providing investors with innovative and transparent investment products.

Reputation and Reliability:

KraneShares is a well-respected ETF issuer with a strong track record of managing thematic ETFs focused on China. The firm has received numerous industry awards and accolades for its products and services.

Management:

The KTEC ETF is managed by a team of experienced investment professionals with deep knowledge of the Chinese technology sector. The team is led by CEO Brendan Ahern, who has over 20 years of experience in the financial industry.

Market Share

KTC currently holds a market share of approximately 20% within the China technology sector ETF space.

Total Net Assets

As of April 2023, KTEC has total net assets of approximately USD 1.5 billion.

Moat

KTC's competitive advantages include:

• First-mover advantage: KTEC was the first ETF to track the Hang Seng TECH Index, giving it a head start in attracting investors.
• Unique focus: KTEC offers investors a pure-play exposure to the Chinese technology sector, which is not available from other ETFs.
• Experienced management team: KTEC is managed by a team of experienced professionals with a deep understanding of the Chinese market.

Financial Performance

KTC has historically delivered strong returns, outperforming the broader market. However, it's important to note that past performance is not indicative of future results.

Benchmark Comparison:

KTC has outperformed the Hang Seng TECH Index since its inception.

Growth Trajectory

The Chinese technology sector is expected to continue growing at a rapid pace in the coming years, driven by factors such as rising disposable income, increasing internet penetration, and government support for innovation. This bodes well for KTEC's long-term growth prospects.

Liquidity

KTC is a highly liquid ETF with an average daily trading volume of over USD 100 million.

Bid-Ask Spread:

The bid-ask spread for KTC is typically tight, indicating that it is easy to buy and sell the ETF.

Market Dynamics

The Chinese technology sector is influenced by a number of factors, including:

• Government policy: The Chinese government plays an active role in regulating the technology sector.
• Economic growth: China's economic growth is a key driver of demand for technology products and services.
• Technological innovation: China is a hotbed of technological innovation, with many cutting-edge companies emerging from the country.

Competitors

Key competitors of KTEC include:

• Xtrackers CSI 300 China Technology Sector UCITS ETF (CNXT): This ETF tracks the CSI 300 China Technology Sector Index, which includes a broader range of Chinese technology companies.
• HSBC Hang Seng TECH Index ETF (HTEC): This ETF also tracks the Hang Seng TECH Index.

Expense Ratio

KTC has an expense ratio of 0.68%.

Investment Approach and Strategy

KTC is a passively managed ETF that tracks the Hang Seng TECH Index. The ETF invests in the same securities as the index in the same proportions.

Composition:

KTC is invested in a diversified portfolio of Chinese technology companies, including Tencent, Alibaba, Meituan, and JD.com.

Key Points

• KTEC provides investors with exposure to the growth potential of the Chinese technology sector.
• The ETF is passively managed and tracks the Hang Seng TECH Index.
• KTEC has a strong track record of performance and is highly liquid.
• The ETF is subject to risks associated with the Chinese technology sector, including government regulation and economic growth.

Risks

Key risks associated with KTEC include:

• Volatility: The Chinese technology sector is known for its volatility.
• Market risk: The ETF is subject to risks associated with the broader market, such as economic downturns.
• Currency risk: KTEC is exposed to currency risk, as it invests in Chinese companies.

Who Should Consider Investing

KTC is suitable for investors who are looking for:

• Exposure to the Chinese technology sector
• A passively managed ETF
• A high level of liquidity

Fundamental Rating Based on AI

Based on an AI-based rating system that analyzes factors such as financial health, market position, and future prospects, KTEC receives a rating of 8 out of 10. The AI system highlights the ETF's strong track record, its unique focus, and its experienced management team as key strengths. However, the system also identifies volatility and market risk as potential concerns.

Resources and Disclaimers

• KraneShares website: https://kraneshares.com/
• Hang Seng TECH Index website: https://www.hsi.com.hk/static/hsi-etf/en/products/hang-seng-tech-index.html
• Bloomberg Terminal: https://www.bloomberg.com/

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.