KraneShares Launches First China STAR Market ETF (Ticker: KSTR) in the United States

Rhea-AI Summary

Krane Funds Advisors has launched the KraneShares SSE STAR Market 50 Index ETF (Ticker: KSTR) on the NYSE, marking the first ETF in the U.S. that directly accesses China’s STAR Market. The ETF tracks the 50 largest companies on the Shanghai Stock Exchange's Science and Technology Innovation Board, which has facilitated $44 billion in fundraising across 200 IPOs since its inception in July 2019. KSTR allows global investors to tap into China's emerging technology sectors, focusing on high-growth industries.

Positive

• Launch of KSTR expands investor access to China's STAR Market.
• STAR Market accounted for 47% of capital raised in China's A-Share market in 2020, indicating strong market activity.
• KSTR is the first ETF to provide direct access to STAR Market-listed companies in the U.S.

Negative

• Investing in KSTR involves risks related to China's political and economic instability.
• The Fund's assets may be concentrated in specific sectors, increasing volatility.

NEW YORK, Jan. 27, 2021 /PRNewswire/ -- Krane Funds Advisors, LLC, ("KraneShares"), a global asset management firm known for its China-focused exchange-traded funds (ETFs) and innovative China investment strategies, today announced the launch of the  KraneShares SSE STAR Market 50 Index ETF (Ticker: KSTR) on the New York Stock Exchange (NYSE).

KSTR tracks the Shanghai Stock Exchange (SSE) Science and Technology Innovation Board 50 Index. The Index comprises the 50 largest securities listed on SSE Science and Technology Innovation Board (STAR Market) as determined by market capitalization and liquidity.

As China has quickly become a world leader in innovation, the Shanghai Stock Exchange developed the STAR Market to promote China's high growth publicly-listed science and technology companies. The STAR Market includes companies from industries such as new-generation information technology, biomedicine, new energy, and environmental protection.

Since its establishment in July 2019, the STAR Market has become one of the largest IPO markets globally and a premier listing venue for prominent Chinese "unicorns" – privately held startup companies valued at over $1 billion. In just over a year, the STAR Market facilitated 200 companies to raise $44 billion.¹ The increase in fund-raising activity on Chinese exchanges last year is mainly attributable to new STAR Market listings, which accounted for 47% of capital raised across China's Mainland A-Share market in 2020.²

"KSTR is the first ETF listed in the United States that offers investors direct access to STAR Market-listed companies³," said Jonathan Krane, CEO of KraneShares. "KraneShares is privileged to work with SSE and NYSE to bring this unique investment opportunity to global investors. We believe KSTR represents companies that are China's future leaders across industries powering the growth engine of China for decades to come."

"The listing of the KraneShares SSE STAR Market 50 Index ETF (Ticker: KSTR) on the NYSE is the first SSE STAR Market-based ETF listed in overseas markets," said Harry FU Hao, Managing Director of Global Business Development Department at the Shanghai Stock Exchange. "We are happy to work with the NYSE and KraneShares to provide overseas investors access to the SSE STAR Market, where star companies from China's high-tech industries and strategic emerging industries cluster."

"The NYSE is committed to bringing new investment opportunities to the public by expanding the ETF ecosystem," said Douglas Yones, Head of Exchange Traded Products at the New York Stock Exchange. "Today's launch of KSTR on NYSE Arca continues that mandate, giving investors access to China's STAR Market for the first time."

For more information about KSTR, visit kraneshares.com/kstr, or talk to your financial advisor.

About KraneShares
Krane Funds Advisors, LLC is the investment manager for KraneShares ETFs. The firm is focused on providing investors with strategies to capture China's importance as an essential element of a well-designed investment portfolio. KraneShares ETFs represent innovative, first-to-market strategies developed based on the firm and its partners' in-depth knowledge of investing. These strategies allow investors to stay current on global market trends and provide meaningful diversification. Krane Funds Advisors, LLC is majority-owned by China International Capital Corporation (CICC).

1. CNBC, "China's experimental stock board gains 200th IPO just over a year after launching", December 6, 2020.
2. The Asset, "A bumper IPO year despite Covid-19", December 14, 2020.
3. Data from Bloomberg, according to Bloomberg's list of all US-listed China ETFs, retrieved 12/14/2020.

Carefully consider the Funds' investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Funds' full and summary prospectus, which may be obtained by visiting www.kraneshares.com. Read the prospectus carefully before investing.

Risk Disclosures:

Investing involves risk, including possible loss of principal. There can be no assurance that a Fund will achieve its stated objectives. The Funds are subject to political, social or economic instability within China which may cause decline in value. Fluctuations in currency of foreign countries may have an adverse effect to domestic currency values. Emerging markets involve heightened risk related to the same factors as well as increase volatility and lower trading volume. The Fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund's gains or losses.

Narrowly focused investments may be subject to higher volatility. The Fund's assets are expected to be concentrated in an industry or group of industries to the extent that the Underlying Index concentrates in a particular industry or group of industries. The securities of companies in an industry or group of industries could react similarly to market developments. Thus, the Fund is subject to loss due to adverse occurrences that affect one industry or group of industries or sector. The Fund is non-diversified.

The Fund may invest in Initial Public Offerings (IPOs). Securities issued in IPOs have no trading history, and information about the companies may be available for very limited periods. In addition, the prices of securities sold in IPOs may be highly volatile. In addition, as the Fund increases in size, the impact of IPOs on the Fund's performance will generally decrease.

Diversification does not ensure a profit or guarantee against a loss.

The KraneShares ETFs are distributed by SEI Investments Distribution Company (SIDCO), which is not affiliated with Krane Funds Advisors, LLC, the Investment Adviser for the Fund. [R_US_KS_SEI]

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SOURCE Krane Funds Advisors, LLC

FAQ

What is the KraneShares SSE STAR Market 50 Index ETF (KSTR)?

KSTR is an ETF listed on the NYSE that tracks the top 50 companies on the Shanghai Stock Exchange's STAR Market.

What markets does KSTR provide access to?

KSTR allows investors to access China's STAR Market, which focuses on high-growth technology and innovation sectors.

How much capital has the STAR Market raised?

Since its launch in July 2019, the STAR Market has raised $44 billion across 200 IPOs.

What are the risks associated with investing in KSTR?

Investing in KSTR poses risks including political instability in China and sector concentration risks, which may lead to higher volatility.