KraneShares Launches Electrification Metals ETF (NYSE: KMET)
NEW YORK, Oct. 13, 2022 /PRNewswire/ -- Krane Funds Advisors, LLC ("KraneShares"), an asset management firm known for its global exchange-traded funds (ETFs) and innovative investment strategies, announced the launch of the KraneShares Electrification Metals ETF (Ticker: KMET) on the New York Stock Exchange today.
KMET offers broad coverage of the key metals needed for the electrification of the global economy. The Fund tracks the Bloomberg Electrification Metals Index, which is comprised of futures contracts on aluminum, copper, nickel, zinc, cobalt, and lithium. As the economy decarbonizes, we expect to see massive demand for renewable energy, electrification, and battery storage. More than
From Electric Vehicles (EVs) and batteries to renewable energy infrastructure, KMET offers exposure to the core metals expected to see strong demand from a range of electrification uses. Increased EV adoption has led to a growing demand for batteries, the key components of which include lithium, nickel, zinc, and cobalt. From 2020-2025, the global battery market could see a nearly five-fold increase in demand.2 While still a relatively new market, EV battery production is well-positioned to be a major growth opportunity for these metals as we continue to improve and streamline the battery supply chain.
Beyond batteries, copper and aluminum will also play an important role in the electrification of the global economy. Aluminum, a durable, lightweight material, can offset the weight of the EV's larger battery and should see increased demand from the expansion of the EV market. Additionally, aluminum has application use in transmission and distribution grids and as a key material in solar panels and wind turbines. Among the most conductive metals, copper is used extensively for electrical wiring. EVs require more than twice as much copper than traditional cars.3 Moreover, copper is a core element in the wiring and cabling for various renewable energy technologies.
"Transitional commodities are expected to experience a supply and demand imbalance over the next decade," said Luke Oliver, Head of Strategy at KraneShares. "These resources may be repriced depending on how they factor into the decarbonization of the global economy. We believe now is the time to invest in these electrification metals as demand is poised to accelerate into the energy transition."
"KMET is a timely expansion of the KraneShares Climate Investment suite, which has quickly evolved from our flagship KraneShares Global Carbon Strategy ETF (Ticker: KRBN) to include regional carbon markets, energy transition equities, and now electrification metals," said Jonathan Krane, Chief Executive Officer at KraneShares. "We believe investors should have direct access to the global decarbonization investment opportunity. We are proud to launch the KraneShares Electrification Metals ETF (Ticker: KMET), which provides unique exposure to a key component of this opportunity and furthers KraneShares' leadership in the space."
"Our goal has always been to push development forward in providing new solutions for the world's changing investment demands," said Dave Gedeon Head of Product for Bloomberg's Multi-Asset Index business. "Integrating unique research data alongside our established Bloomberg Commodity Benchmark, we are proud that KraneShares has adopted our electrification metals index for KMET to meet the thematic demand across the changing commodity markets."
For additional information on the KraneShares Electrification Metals ETF (Ticker: KMET), contact your financial advisor or visit kraneshares.com/KMET.
Krane Funds Advisors, LLC is the investment manager for KraneShares ETFs. KraneShares is a premier platform that develops and delivers differentiated, high-conviction investment strategies to global investors.
Since 2013, KraneShares has become one of the leading China ETF providers. Given China's importance in addressing the global climate challenge, our Climate Suite is a natural growth area. KraneShares strives to deliver innovative first-to-market strategies based on strong partnerships and deep investing knowledge. KraneShares helps investors stay current on global market trends and provides meaningful diversification.
Krane Funds Advisors, LLC, is a signatory of the United Nations-supported Principles for Responsible Investing (UN PRI). The firm is majority-owned by China International Capital Corporation (CICC).
Citations:
- International Renewable Energy Agency (IRENA). Forecast as of June of 2021. Data retrieved 5/31/2022.
- S&P Global Market Intelligence, EV Impact: Battery disruptors are jolting metal supply chains, September 21, 2021
- Reuters, "Copper's Role in Growing Electric Vehicle Production," May 5, 2021, retrieved 9/22/2021.
Carefully consider the Fund's investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund's full and summary prospectus, which may be obtained by visiting www.kraneshares.com Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal. There can be no assurance that a Fund will achieve its stated objectives. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index.
This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change. Certain content represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results; material is as of the dates noted and is subject to change without notice.
The Fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund's gains or losses. A derivative (i.e., futures/forward contracts, swaps, and options) is a contract that derives its value from the performance of an underlying asset. The primary risk of derivatives is that changes in the asset's market value and the derivative may not be proportionate, and some derivatives can have the potential for unlimited losses. Derivatives are also subject to liquidity and counterparty risk. The Fund is subject to liquidity risk, meaning that certain investments may become difficult to purchase or sell at a reasonable time and price. If a transaction for these securities is large, it may not be possible to initiate which may cause the Fund to suffer losses. Counterparty risk is the risk of loss in the event that the counterparty to an agreement fails to make required payments or otherwise comply with the terms of derivative.
The use of futures contracts is subject to special risk considerations. The primary risks associated with the use of futures contracts include: (a) an imperfect correlation between the change in market value of the reference asset and the price of the futures contract; (b) possible lack of a liquid secondary market for a futures contract and the resulting inability to close a futures contract when desired; (c) losses caused by unanticipated market movements, which are potentially unlimited; (d) the inability to predict correctly the direction of market prices, interest rates, currency exchange rates and other economic factors; and (e) if the Fund has insufficient cash, it may have to sell securities or financial instruments from its portfolio to meet daily variation margin requirements, which may lead to the Fund selling securities or financial instruments at a loss. The Fund invests through a subsidiary, and is indirectly exposed to the risks associated with the Subsidiary's investments. Since the Subsidiary is organized under the law of the Cayman Islands and is not registered with the SEC under the Investment Company Act of 1940, as such the Fund will not receive all of the protections offered to shareholders of registered investment companies. The Fund and its Subsidiary will be considered commodity pools upon commencement of operations, and each will be subject to regulation under the Commodity Exchange Act and CFTC rules. Commodity pools are subject to additional laws, regulations and enforcement policies, which may increase compliance costs and may affect the operations and performance of the Fund and the Subsidiary. Futures and other contracts may have to be liquidated at disadvantageous times or prices to prevent the Fund from exceeding any applicable position limits established by the CFTC. The value of a commodity-linked derivative investment typically is based upon the price movements of a physical commodity and may be affected by changes in overall market movements, volatility of the Index, changes in interest rates, or factors affecting a particular industry or commodity.
In addition to the risks associated with commodities, investments in metals may be highly volatile and can change quickly and unpredictably due to the supply and demand of each metal, environmental or labor costs, political, legal, financial, accounting, and tax matters, and other events that the Fund cannot control. Changes in international monetary policies or economic and political conditions can affect the value of metal investments. The principal supplies of metal industries may be concentrated in a few countries and regions, causing the metal price to decline and materially impact the Fund's performance. The metals the Fund will gain exposure to are considered industrial metals and may be subject to several additional factors which might cause price volatility. These may include changes in the level of industrial activity using industrial metals, supply chain disruptions, adjustments to inventory, variations in production costs, costs associated with regulatory compliance, and changes in industrial, government, and consumer demand.
Fluctuations in currency of foreign countries may have an adverse effect to domestic currency values. The Fund is subject to interest rate risk, which is the chance that bonds will decline in value as interest rates rise. Narrowly focused investments typically exhibit higher volatility. The Fund's assets are expected to be concentrated in a sector, industry, market, or group of concentrations to the extent that the Underlying Index has such concentrations. The securities or futures in that concentration could react similarly to market developments. Thus, The Fund is subject to loss due to adverse occurrences that affect that concentration. KMET is non-diversified.
The Fund is new and does not yet have a significant number of shares outstanding. If the Fund does not grow in size, it will be at greater risk than larger funds.
Fund shares are bought and sold on an exchange at market price (not NAV) and are not individually redeemed from the Fund. However, shares may be redeemed at NAV directly by certain authorized broker-dealers (Authorized Participants) in very large creation/redemption units. The returns shown do not represent the returns you would receive if you traded shares at other times. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns. Market price returns are based on the official closing price of an ETF share or, if the official closing price isn't available, the midpoint between the national best bid and national best offer ("NBBO") as of the time the ETF calculates the current NAV per share. NAVs are calculated using prices as of 4:00 PM Eastern Time.
Although the information provided in this document has been obtained from sources which Krane Funds Advisors, LLC believes to be reliable, it does not guarantee accuracy of such information and such information may be incomplete or condensed.
The KraneShares ETFs, KFA Funds ETFs, and KraneShares Mutual Funds are distributed by SEI Investments Distribution Company (SIDCO), 1 Freedom Valley Drive, Oaks, PA 19456, which is not affiliated with Krane Funds Advisors, LLC, the Investment Adviser for the Fund.
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SOURCE Krane Funds Advisors, LLC
