KraneShares China Onshore Equity UCITS ETF First to Track MSCI China A 50 Connect Index, Ticker: KA50
London UK 8 November 2021 – Krane Funds Advisors, LLC, (“KraneShares”), an asset management firm known for its global exchange-traded funds (ETFs) and innovative investment strategies, now tracks the MSCI China A 50 Connect Index for its China onshore equity UCITS ETF. The Fund’s name changed to the KraneShares MSCI China A 50 Connect UCITS ETF (Ticker: KA50).
The new index consists of 50 large-cap Shanghai and Shenzhen listed stocks (A-Shares) available through Stock Connect. On 18 October 2021, the Hong Kong Exchanges and Clearing Ltd. (HKEX) launched Futures contracts based on the MSCI China A 50 Connect Index1. These Futures contracts, designed for offshore investors, represent the first officially recognized risk management tools for Stock Connect-eligible A-shares.
“The MSCI China A 50 Connect Index is designed to represent the performance of the 50 largest securities across all GICS® sectors, providing a diversified measure across the Chinese economy,” said Christine Berg, Managing Director of Index Client Coverage at MSCI. “Using an innovative sector-neutral approach and based on the Stock Connect program, the Index mirrors the sector weight allocation of its parent index, the MSCI China A Index. It aims to enable institutional investors seeking to track China’s sector leaders, identify the largest stocks in key sectors, and serve as the basis for index-linked financial products.”
The MSCI China A 50 Connect Index offers similar exposure and high correlation to broad China A-share benchmarks.2 However, the new Index may offer greater liquidity and investability than those broad indexes because it comprises the most liquid large-cap securities and balanced sector weighting methodology. Additional benefits of the new Index include an expected reduction in tracking error and bid-ask spreads given that market makers can directly hedge exposure with Futures.
“KA50 will focus on the largest most liquid stocks, which receive the majority of foreign interest and inflows,3” said Dr. Xiaolin Chen, Head of International at KraneShares. “We believe these stocks will continue to be the primary beneficiaries of increased international investment in the years to come.”
“We have a long history of partnering with MSCI as the index provider for our Mainland China equity ETFs. In 2014 we launched the first and largest MSCI-linked China A-Share ETF in the United States4,” said Jonathan Krane, CEO of KraneShares. “We are excited to continue the relationship in our UCITS range with the KraneShares MSCI China A 50 Connect UCITS ETF (Ticker: KA50), which provides industry-leading international access to the China onshore equity market for global investors.”
For more information on the KraneShares MSCI China A 50 Connect UCITS ETF (Ticker: KA50) visit: https://kraneshares.eu/ka50ln
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).
- HKEX, “HKEX Launches MSCI China A 50 Connect Index Futures”, 18 October, 2021.
- Data from MSCI as of August 2021
- Liu Kevin “Understanding China’s post-pandemic new normal and long-term trends” CICC November 2021
- Bloomberg as of 5 November 2021.