KraneShares CSI China Internet UCITS ETF Accum Hedged GBP · LSE:KWBH
KraneShares CSI China Internet UCITS ETF Accum Hedged GBP — KraneShares — Investor Presentation (December 2019)
25 slides from KraneShares CSI China Internet UCITS ETF Accum Hedged GBP's investor presentation, Dec 31, 2019
Slide 1: The China Consumer E-Commerce Opportunity
KWEB 31/Dec/2019 The China Consumer E-Commerce Opportunity An Overview of the KraneShares CSI China Internet UCITS 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 UCITS ETF Lists on the London Stock Exchange
The KraneShares CSI China Internet UCITS ETF Lists on the London Stock Exchange On 25 January 2019, KraneShares launched the KraneShares CSI China Internet UCITS ETF (Ticker: KWEB) on the London Stock Exchange. The fund tracks the CSI Overseas China Internet Index, the same benchmark and strategy as
Slide 4: KWEB 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 UCITS • Access to Chinese internet
Slide 5: China's urbanization and GDP per capita
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 Population Urbanization Rate & IMF China GDP Per Capita Current Prices 70 10,000 60 8,000 50 40 6,000 USD % 30 4,000 20 2,000 10 0 0 GDP per capita (curren
Slide 6: Urban vs rural disposable income in China
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 3,000 USD 2,000 1,000 0 China Household - Per capita annual disposable income of urban households Ch
Slide 7: 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. • 59.6% of China’s population has internet access compared to 87.0% in the U.S. • We belie
Slide 8: 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 9: Retail sales have expanded steadily in China
Retail sales have expanded steadily in China. Value of Monthly China Retail Sales Index (31/Dec/2009 - 31/Dec/2019) 4000 • Total Chinese retail sales reached 3500 $5.5 trillion in 2018 3000 Index Value (CNY Billions) • Chinese retail websites sold $1.3 trillion 2500 worth of goods in 2018, a 23.9% y
Slide 10: Revenue growth of China internet companies vs U.S. peers
The 1 year and 5 year average revenue growth rates for China internet companies is higher than that of many U.S. internet companies. Top 10 KWEB holdings vs. their U.S. equivalents as of 30/Dec/2019 China Internet Companies U.S. Internet Companies Primary Comparable U.S. Top 10 KWEB Holdings KWEB We
Slide 11: Smart phones provide first point of internet access
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, like the Mi Max 2 from Xiaomi pictured below, has meant much
Slide 12: China's technology 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 12
Slide 13: 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 14: Alibaba outperformed Amazon in revenue growth and 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% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20
Slide 15: 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 16: E-Commerce benefits Chinese logistics and delivery companies
The proliferation of E-Commerce in China also benefits Chinese logistics and delivery companies. Over 50 billion packages were delivered in China in 2018, an increase of 26% from the previous year1. JD.com warehouse employees prepare same-day delivery Unlike competitor Alibaba, JD.com owns its own l
Slide 17: China is Rapidly Becoming A Global Internet Services Leader
China is Rapidly Becoming A Global Internet Services Leader. 2013 2019 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 Alphabet Inc $972.9B Toutiao (Bytedance) $75.0B Amazon $182.5B Amazo
Slide 18: KraneShares CSI China Internet UCITS ETF Key Fund Information
Key Fund Information KraneShares CSI China Internet London Stock Exchange KWEB LN UCITS ETF (LSE: KWEB) Top Ten Holdings as of 30/Dec/2019 The Fund’s Holdings Are Subject to Change. % Ticker Euronext Amsterdam KWEB NA KraneShares CSI China Internet UCITS ETF is “A sub fund of Management Fee 75bps AL
Slide 19: Strategic China Internet allocation in 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 20: 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 high exposure to SOEs which constitute 32.11%
Slide 21: 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 22: Adjusting 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 23: Historical return and volatility of KWEB and its top holdings
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 (31/July/2013) & The Past 2 Years Since
Slide 24: China Internet performance compared to other indexes
China Internet performance compared to the U.S., Emerging Markets, & Other China Indexes Since KWEB Inception (31/Jul/2013) as of 31/Dec/2019 Past Year as of 31/Dec/2019* 125% 118.64% 40% 107.93% 31.48% 100% 29.21% 76.22% 72.50% 23.04% 75% 21.91% 59.96% 18.63% 20% 14.34% 50% 40.06% 25% 0% 0% S&P 500
Slide 25: Important Notes
Important Notes This information is being communicated by KraneShares, which is an appointed representative of DMS Capital Solutions UK Limited, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom under the reference number 503325. Investing involves risk, incl