KraneShares Global Carbon Strategy ETF · AMEX:KRBN
KraneShares Global Carbon Strategy ETF — Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL) — Investor Presentation (June 2022)
24 slides from KraneShares Global Carbon Strategy ETF's investor presentation, Jun 30, 2022
Slide 1: Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL)
Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL) Q3 2022 1
Slide 2: About Quadratic Capital Management and Krane Funds Advisors, LLC
About Quadratic Capital Management and Krane Funds Advisors, LLC Quadratic Capital Management Quadratic Capital Management is an innovative asset management firm founded in 2013 by Nancy Davis. The firm has utilized its significant expertise in the interest rate volatility and options markets to con
Slide 3: Select IVOL Highlights, Milestones, and Awards
Select IVOL Highlights, Milestones, and Awards September 2019: March 2020: April 2020: February 2021: Forbes profiles Nancy Barron’s 100 Most Influential Women IVOL named “Best New US Fixed IVOL surpasses $1.5 Billion AUM and IVOL strategy in Finance on inaugural list Income Fund of 2019” by ETF.com
Slide 4: IVOL: Low Correlations To Common Asset Classes
IVOL: Low Correlations To Common Asset Classes1 ➢ IVOL may provide potentially attractive diversification during times when many other holdings sell off together. ➢ Historically, IVOL has acted as a partial hedge, given its very low correlations with the major indexes shown below. ➢ Historic data do
Slide 5: Access: Exposure to the Rates Markets
Access: Exposure to the Rates Markets ➢ IVOL provides access to the OTC rates market, which is the largest single asset class; also provides the potential for differentiated performance from stocks and bonds. Until IVOL, this market was very difficult to access without ISDAs. ➢ IVOL’s OTC rates opti
Slide 6: IVOL Portfolio Composition
IVOL Portfolio Composition ➢ IVOL portfolio is approximately 85% US Treasuries (TIPS) IVOL as ➢ Balance of portfolio is dynamically managed fixed income TIPS Alone options Potential Solution • TIPS are long duration; • IVOL seeks to address the therefore, they lose in price duration exposure in TIPS
Slide 7: IVOL Portfolio Applications
IVOL Portfolio Applications Investments: Potential Risks: How IVOL potentially manages risks: Passive Fixed Income The Bloomberg Agg Index is short fixed income volatility due to IVOL can act as a potential diversifier to the Agg. IVOL mortgages making up 30%. Homeowners are long the option to provi
Slide 8: IVOL Completion Portfolio Application Example: Passive Fixed Income
IVOL Completion Portfolio Application Example: Passive Fixed Income • Many investors utilize products tied to the Bloomberg US Aggregate Bond Index (“the AGG”) for passive fixed income exposure. • Important issues with the "AGG" investors should keep in mind: ➢ Roughly 30% of the AGG's holdings are
Slide 9: IVOL Hedge Portfolio Application Example: Risk Off for Equities
IVOL Hedge Portfolio Application Example: IVOL During Periods of “Risk Off” for Equities • The IVOL portfolio potentially has the ability to benefit from equity market shocks. How can IVOL’s options potentially benefit equity holders? As the chart below shows, equity market sell-offs have historical
Slide 10: IVOL Scenario Analysis
IVOL Scenario Analysis Four Factors that Impact IVOL POSITIVE ✓Higher TIPS Bond Prices X Lower TIPS Bond Prices ✓Higher Interest Rate Volatility X Lower Interest Rate Volatility ✓Expectations for Fewer Fed Hikes or X Expectations for More Fed Hikes or Lower Short Dated Interest Rates Higher Short Da
Slide 11: IVOL Performance History
IVOL Performance History • IVOL has outperformed its TIPS Index Benchmark, especially from the start of the equity Cumulative % Average Annualized % selloff on 2/20/2020 until the end of Q1 2021. Since Since 3 Mo 6 Mo 1yr 3yr Inception Inception • In Q1 2021, IVOL had a strong outperformance of more
Slide 12: IVOL Risk Profile
IVOL Risk Profile Investing involves risk, including possible loss of principal. There can be no assurance that the Fund will achieve its stated objectives, including its objective of eliminating the curve or inflation risk. Investors should take note of the following risks before investing in IVOL.
Slide 13: Guide to Trading ETFs
Guide to Trading ETFs ETF liquidity is determined by the asset class, not by the fund size • Exchange-traded funds (ETFs) are a wrapper, and although an investor may hold a large percentage of an ETF, one must look at the percentage owned of the underlying asset class. ETF investors are not impacted
Slide 14: Understanding ETF Liquidity
Understanding ETF Liquidity An ETF is not a stock • If an ETF does not trade a certain number of shares per day, is the fund illiquid? No. It’s a plausible assumption from a single-stock perspective, but with ETFs, there is more to consider. The key is to understand the difference between the primar
Slide 15: Flow Chart of Creation Redemption Process for ETFs
Flow Chart of Creation Redemption Process for ETFs • Small trades in ETFs flow normally are done in the secondary market, where all market participants can trade. It behaves like a stock, and everyone can buy (sell) from the best seller (buyer) • Large and institutional trades – which normally would
Slide 16: The IVOL Ecosystem
The IVOL Ecosystem Portfolio Manager: Advisor: Krane Quadratic Funds Capital Custodian: BBH Exchange: NYSE Auditor: KPMG Administrator SEI 16
Slide 17: Portfolio Management and Capital Markets Leadership
Portfolio Management and Capital Markets Leadership Nancy Davis, Chief Investment Officer, Quadratic Capital Management Nancy Davis founded Quadratic Capital in 2013. Nancy is the portfolio manager for the Quadratic Interest Rate Volatility and Inflation Hedge ETF (Ticker: IVOL). Nancy began her car
Slide 18: Quadratic Capital and Krane Funds Leadership
Quadratic Capital and Krane Funds Leadership Jonathan Krane, Chief Executive Officer, Krane Funds Advisors Jonathan Krane is the founder and Chief Executive Officer of Krane Funds Advisors, the premier platform for developing and delivering differentiated, high- conviction investment strategies to g
Slide 19: Quadratic Capital and Krane Funds Leadership
Quadratic Capital and Krane Funds Leadership Brendan Ahern, Chief Investment Officer, Krane Funds Advisors Brendan Ahern is the Chief Investment Officer at Krane Funds Advisors (KFA). Mr. Ahern joined KFA in 2012 and was an original member of the team that launched its first ETFs. He leads the firm’
Slide 20: Quadratic Capital and Krane Funds Leadership
Quadratic Capital and Krane Funds Leadership Guy Ferrara, Managing Director, Krane Funds Advisors Guy has spent the last 20 years in the asset management industry. Prior to KFA, Guy worked for UBS in client education, portfolio construction, and asset retention. Over the course of his 20-year career
Slide 21: Dedicated to Responsible Investing with a Strong Focus on ESG
Dedicated to Responsible Investing with a Strong Focus on ESG Krane Funds is a UN PRI signatory and as such adheres to the following principles: • To be active owners and incorporate ESG issues into our ownership policies and practices • To seek appropriate disclosure on ESG issues by the entities i
Slide 22: The Quadratic Interest Rate Volatility and Inflation Hedge ETF
The Quadratic Interest Rate Volatility and Inflation Hedge ETF Key Fund Information Ticker IVOL Fund Name Quadratic Interest Rate Volatility and Inflation Hedge ETF Primary Exchange NYSE Total Annual Fund Operating Expense 1.04% Inception Date 5/13/2019 Distribution Frequency Monthly 22
Slide 23: Index Definitions
Index Definitions The Dow Jones Industrial Average (“Dow”) is an index that tracks 30 large, publicly-owned companies trading on the New York Stock Exchange and the NASDAQ. The S&P 500, (“S&P”), is a stock market index that measures the stock performance of 500 large companies listed on stock exchan
Slide 24: The Fund's investment objectives, risks, charges and expenses must be considered carefully
The Fund's investment objectives, risks, charges and expenses must be considered carefully before investing. The Fund’s summary and full prospectus contain this and other important information about the Fund and may be obtained by calling 1-833-IVOL-ETF (1-833-486-5383) or visiting www.IVOLETF.com.