KraneShares MSCI All China Health Care Index ETF · AMEX:KURE
KraneShares MSCI All China Health Care Index ETF — KraneShares — Investor Presentation (September 2020)
25 slides from KraneShares MSCI All China Health Care Index ETF's investor presentation, Sep 30, 2020
Slide 1: The China Consumer E-Commerce Opportunity
KWEB 9/30/2020 The China Consumer E-Commerce Opportunity An Overview of the KraneShares CSI China Internet ETF (Ticker: KWEB) info@kraneshares.com 1
Slide 2: Introduction to KraneShares
Introduction to KraneShares 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
Slide 3: KraneShares CSI China Internet ETF Investment Strategy
Investment Strategy: KWEB KWEB seeks to measure the performance of the investable universe of publicly traded China-based companies whose primary business or businesses are in the Internet and Internet-related sectors. KraneShares CSI KWEB features: China Internet ETF • Access to Chinese internet co
Slide 4: As China's population moves into cities, they gain access to better jobs and wages
As China’s population moves into cities, they gain access to better jobs and wages, which in turn has a positive impact on GDP per capita. China GDP Per Capita Current Prices & China Population Urbanization Rate 12,000 70 60 10,000 50 8,000 40 USD % 6,000 30 4,000 20 2,000 10 0 0 GDP Per Capita (cur
Slide 5: China's urban population has almost three times more disposable income than rural
China’s urban population has almost three times more disposable income than their rural counterparts. China Household Per Capita Annual Disposable Income of Urban & Rural Households 6,000 5,000 4,000 USD 3,000 2,000 1,000 0 China Household - Per capita annual disposable income of urban households Ch
Slide 6: The China Internet Evolution
The China Internet Evolution • China’s E-Commerce market size surpassed the U.S. for the first time in 2014, and China’s total retail sales surpassed total retails sales of the U.S. for the first time in 2017. • 61.2% of China’s population has internet access compared to 89.5% in the U.S. • We belie
Slide 7: A Tale of Two Chinas
A Tale of Two Chinas In 2013, the services sector surpassed the industrial sector as the largest contributor to China’s GDP for the first time. While traditional manufacturing is slowing the service sector Purchasing Managers’ Index (PMI) indicates healthy growth in domestic consumption. China GDP B
Slide 8: Retail sales have expanded steadily in China
Retail sales have expanded steadily in China over the past 10 years. Value of Monthly China Retail Sales Index (9/30/2010 - 8/31/2020) 4,500 4,000 • Total Chinese retail sales reached Index Value (CNY Billions) $5.8 trillion in 2019 3,500 3,000 • Chinese retail websites sold $1.5 trillion 2,500 wort
Slide 9: China internet companies' revenue growth vs U.S. internet companies
The 1 year and 5-year average revenue growth rates for China internet companies are higher than those of many U.S. internet companies. Top 10 KWEB holdings vs. their U.S. equivalents as of 9/30/2020 China Internet Companies U.S. Internet Companies Comparable U.S. Top 10 KWEB Holdings Primary Busines
Slide 10: Smart phones provide the first point of internet access in the developing world
For the majority of the developing world, smart phones provide the first point of internet access, bypassing traditional computers. The proliferation of low cost smart phones across emerging Mobile-cellular telephone subscriptions markets (EM), like the Mi Max 2 from Xiaomi pictured below, has meant
Slide 11: China's rapid adoption of new technologies has produced a leapfrogging effect
China’s rapid adoption of new technologies has produced a “leapfrogging” effect Payment Commerce Cash Checking Credit Mobile Pay Local Market Big Box Retailer E-Commerce Transportation Healthcare Taxi Local Medical Care Hospitals E-Health Car Ownership App-Based Ride Sharing 11
Slide 12: The Alibaba Ecosystem
The Alibaba Ecosystem China Domestic Marketplaces Global Marketplaces 1688.com Tmall.com (B2B Ecommerce Marketplace) (B2C Online Retail Platform) AliExpress Taobao (Global B2B Marketplace) (Global C2C E-commerce Website) Cainiao Alimama (E-commerce Logistics Platform) (Online Advertising Platform) A
Slide 13: Alibaba has outperformed Amazon in revenue growth and profit margins
Historically, Alibaba has consistently outperformed Amazon in terms of revenue growth and profit margins. YoY Revenue Growth Profit Margins 90% 80% 80% 60% 70% 40% 60% 20% 50% 40% 0% 30% -20% 20% -40% 10% -60% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 14: Apps like WeChat integrate an ecosystem of services
Apps like Tencent’s WeChat integrate an ecosystem of services including messaging, social media, mobile payments, wealth management, & taxi hailing. In 2016, the US taxi hailing service Uber sold its Chinese business to local competitor Didi (logo below). Unlike Uber, which relies on a WeChat users
Slide 15: E-Commerce in China also benefits logistics and delivery companies
The proliferation of E-Commerce in China also benefits Chinese logistics and delivery companies. Over 60 billion packages were delivered in China in 2019, an increase of 20% from the previous year1. JD.com warehouse employees prepare same-day delivery Unlike competitor Alibaba, JD.com owns its own l
Slide 16: China is rapidly becoming a global internet services leader
China is rapidly becoming a global internet services leader. 2013 2020 Potential Future IPOs Top 10 Global Internet Companies Top 10 Global Internet Companies Top 10 Private Companies3 By Market Cap1 By Market Cap2 Alphabet $374.4B Apple $1.94T Toutiao (Bytedance) $140.0B Amazon $182.5B Amazon $1.55
Slide 17: KraneShares CSI China Internet ETF
KraneShares CSI China Internet ETF Fund Details Data as of 9/30/2020 Top 10 Holdings as of Ticker % 9/30/2020 Holdings are Investment Strategy: Primary Exchange NYSE subject to change. KWEB (the Fund) tracks the CSI Overseas China Internet Index (the CUSIP 500767306 ALIBABA GRP-ADR BABA 10.71 Index)
Slide 18: Adding a strategic China Internet allocation to EM portfolios
Adding a strategic China Internet allocation to EM portfolios can increase exposure to growth sectors. • Broad-based EM indexes often have greater weights to sectors such as financials and commodities and less exposure to growth sectors.2 • Investors may consider adding a strategic China Internet al
Slide 19: Traditional China indexes have greater exposure to State-Owned Enterprises
Traditional China indexes have greater exposure to State-Owned Enterprises. • State-Owned Enterprises are defined by MSCI as companies whose largest shareholder is a government entity or whose government ownership is over 20%.1 • The MSCI China Index has higher exposure to SOEs, which constitute 22%
Slide 20: A strategic China Internet allocation can reduce exposure to State-Owned Enterprises
A strategic China Internet allocation can reduce exposure to State-Owned Enterprises. 100% MSCI EM 75% MSCI EM / 25% China Internet1 50% MSCI EM / 50% China Internet1 25% MSCI EM / 75% China Internet1 SOEs 6% SOEs SOEs 13% SOEs 20% 26% Non-SOEs Non-SOEs 74% 81% Non-SOEs Non-SOEs 87% 94% Information
Slide 21: Investors can adjust their strategic China Internet allocation within EM
Investors can adjust their strategic China Internet allocation within EM to match their specific risk-reward profile. • China Internet is more volatile than EM broadly, but has provided superior annualized returns and improved Sharpe ratios since the inception of the CSI Overseas China Internet Inde
Slide 22: KWEB's basket approach to the China Internet sector
KWEB’s investment strategy provides a basket approach to China Internet sector which is aimed at potentially reducing volatility compared to individually held China Internet stocks. Historical Return / Volatility of KWEB & Its Top Holdings Since KWEB Inception (7/31/2013) & The Past 2 Years Since In
Slide 23: China Internet performance compared to the U.S., Emerging Markets, & Other China Indexes
China Internet performance compared to the U.S., Emerging Markets, & Other China Indexes Since KWEB Inception (7/31/2013) as of 09/30/2020 Past Year as of 09/30/2020* 200% 189.78% 80% 175% 63.85% 150% 60% 130.82% 125% 101.38% 104.34% 100% 40% 32.22% 33.10% 75% 54.48% 15.14% 20% 50% 38.95% 10.84% 6.6
Slide 24: Important Notes
Important Notes 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 befor
Slide 25: Important Notes (continued)
Important Notes (continued) The S&P 500 Index: is an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ. The MSCI Emerging Markets Net USD Index: captures large and mid cap representation across 23 Emerging Markets