Featured Speaker: Brendan Ahern, Chief Investment Officer, KraneShares

Thursday, April 20, 2017 - Featured Speaker Series - This specialized blog series highlights dynamic speakers from the most recent ETP Forum and offers a window into the insight that they share with the attendees. As the speaking faculty continues to offer thought leadership on cutting-edge investment strategies, we use this feature to supplement the event’s panel discussions and share the full breadth of select speaker’s insights – we hope that you enjoy this special series of posts.

Each Fall and Spring we chair The ETP Forum which features some of the brightest minds in Capital Management who have consistently advanced new thought leadership in the arena of Exchange-Traded-Products. Today, we feature Brendan Ahern, Chief Investment Officer of KraneShares, who recently served as a panelist on the Smart Beta panel at the Spring 2017 ETP Forum on Friday, April 7^th at The New York Athletic Club.

Smart Beta strategies are soaring in popularity and now span just about all asset classes, sectors, geographies and investment factors. As investor adoption increases and Smart Beta products continue to proliferate, the need to differentiate within this category will only increase. KraneShares, a pioneer in China-focused ETFs, clearly understands this and illuminated their unique position within the Smart Beta space during the panel.

Despite the profusion of product offerings now available to investors, Smart Beta access to international markets remains limited. This is particularly true for the world’s second largest economy, China, which is notorious for its restrictions on foreign investors. Against this backdrop, KraneShares occupies a truly unique position within the Smart Beta landscape, with its innovative suite of Chinese ETFs.

KraneShares is one of only a select few ETF providers licensed to hold China A-shares as a Renminbi Qualified Foreign Institutional Investor (RQFII). Coincidentally, Brendan’s discussion on Smart Beta and opportunities that exist for investors in China coincided with KraneShares’ three-year anniversary of its pioneering KraneShares Bosera MSCI China A Share ETF (KBA). With a 5.44 ETFG Green Diamond Reward Score and over $56.9 million in AUM, KBA has steadily attracted interest from investors seeking exposure to the world’s second largest economy.

KBA breaks down barriers to investors by providing access to the Shanghai and Shenzhen Stock Exchanges, which are traditionally not available to U.S. investors. KBA's holdings are composed of the Mainland Chinese equities scheduled for inclusion into the widely-followed MSCI emerging markets indexes. With $1.6 trillion benchmarked to the affected indexes, full inclusion of Onshore Chinese equities could see significant flows into the securities KBA owns today.

Aside from providing entry to the difficult-to-access Chinese A Shares market, KraneShares also manages an innovative “all China” Smart Beta strategy with exposure to the "new China" economy. The KraneShares Zacks New China ETF (KFYP) is focused on those sectors/industries highlighted in China's Five Year Plan (FYP) which includes Technology, Consumer Staples, Consumer Discretionary and Healthcare. As China undergoes its transformation from a manufacturing-heavy to a consumer-driven economy, KFYP investors may stand to benefit by being underweighted in Manufacturing, Financials, Industrials and Heavy Materials that defined China’s past economic plans.

The sectors expected to benefit from the plan are evaluated and the stocks within each sector are subsequently ranked based on various investment factors, including price, cash flow, free cash flow, momentum and volatility. KFYP maintains a balanced market capitalization exposure to Large Cap, Mid Cap and Small Cap Chinese companies trading in Mainland China, Hong Kong and the United States. With its Smart Beta Access to the fastest-growing segment of the Chinese economy, KFYP offers investors an opportunity not found in other funds in the marketplace.

Thank you for reading ETF Global Perspectives!

ETFG 21 Day Free Trial:  https://www.etfg.com/signup/quick

_____________________________________________________________

Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.

This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.  Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested.  Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate.  Where an investment or security is denominated in a different currency to the investor's currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor.