KEM KraneShares Trust Dynamic Emerging Markets Strategy

Krane Funds Advisors, LLC ("KraneShares"), an asset management firm known for its China-focused exchange-traded funds (ETFs) and innovative investment strategies, today announced the launch of the KraneShares Dynamic Emerging Markets Strategy ETF (Ticker: KEM) on the New York Stock Exchange.

KEM is designed to address evolving opportunities within the emerging markets (EM) landscape, highlighting the significance of China as a separate asset class. KEM dynamically allocates between China and Emerging Markets ex China, optimizing China exposure based on real-time signals. China and Emerging Markets ex China are represented in KEM by the KraneShares MSCI All China Index ETF (Ticker: KALL) and the KraneShares MSCI Emerging Markets ex China Index ETF (Ticker: KEMX), respectively.

"Through years of research, we discovered that investors can potentially achieve better returns by treating China as a distinct asset class within their EM portfolio. China has the world’s second-largest equity market and has shown differentiated historical performance as evidenced by its low correlation to global equity markets,” stated Jonathan Shelon, Chief Operating Officer at KraneShares. “Our goal with KEM is to provide investors a powerful tool that leverages our best thinking on how to approach investing in EM."

The investment strategy of KEM is rooted in three key pillars:

Enhanced Strategic Allocation: KEM begins with a baseline allocation that mirrors the MSCI Emerging Markets Index weightings, with China and Emerging Markets ex-China currently set at 31% and 69%, respectively.1

Systematic Overlay and Risk Management: The allocation between China and Emerging Markets ex China is dynamically adjusted based on weighted valuation signals for the underlying fund holdings, allowing for a maximum of 30% overweight/underweight compared to the strategic allocation. Additionally, the strategy can allocate up to 10% to cash based on market conditions.

Adaptability to Market Conditions: KEM is continuously monitored and adjusted at least quarterly. Adjustments can also occur more frequently to ensure that the portfolio remains aligned with its objectives.

"The KEM ETF is based on our flagship model portfolio, the Krane Dynamic Emerging Markets Strategy, which has been running for over two years and has been performing well compared to the MSCI Emerging Markets Index,"2 added Anthony Sassine, KraneShares Senior Investment Strategist. "We were able to achieve positive results through active management guided by strict rules that take a dynamic approach to China asset allocation and varying cash positions.”

For additional information on the KraneShares Dynamic Emerging Markets Strategy ETF (Ticker: KEM), visit kraneshares.com/kem or contact your financial advisor.

About Krane Funds Advisors, LLC

Krane Funds Advisors, LLC is the investment manager for KraneShares ETFs. Our suite of China-focused ETFs provides investors with solutions to capture China’s importance as an essential element of a well-designed investment portfolio. We strive to deliver innovative first-to-market strategies developed based on our strong partnerships and deep investing knowledge. We help investors stay current on global market trends and aim to provide 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:

1. Data from MSCI as of 6/30/2023.
2. Data from Krane Model Portfolios and MSCI as of 6/30/2023.

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.

Risk Disclosures:The ability of the Fund to achieve its respective investment objectives is dependent, in part, on the continuous availability of A Shares and the ability to obtain, if necessary, additional A Shares quota. If the Fund is unable to obtain sufficient exposure to limited availability of A Share quota, the Fund could seek exposure to the component securities of the Underlying Index by investment in other types of securities. The Fund is actively-managed and may not meet its investment objective based on the Adviser’s success or failure to implement investment strategies for the Fund. The Fund may incur high portfolio turnover rates, which may increase the Fund’s brokerage commission costs and negatively impact the Fund’s performance. The Fund is subject to political, social or economic instability within China which may cause decline in value. Emerging markets involve heightened risk related to the same factors as well as increase volatility and lower trading volume. Fluctuations in currency of foreign countries may have an adverse effect to domestic currency values.

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 the derivative.

The Fund will invest in other investment companies, including those advised, sponsored or otherwise serviced by Krane and/or its affiliates. The Fund will indirectly be exposed to the risks of investments by such funds and will incur its pro rata share of the Underlying ETFs’ expenses. 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. 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 of wider bid-ask spreads for its shares, trading at a greater premium or discount to NAV, liquidation and/or a trading halt.

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. In addition to the normal risks associated with investing, investments in smaller companies typically exhibit higher volatility. KEM is non-diversified.

Henry Greene +1 (646) 257-9441