KraneShares MSCI China Clean Technology Index ETF · AMEX:KGRN
KraneShares MSCI China Clean Technology Index ETF — KraneShares — Investor Presentation (May 2021)
23 slides from KraneShares MSCI China Clean Technology Index ETF's investor presentation, May 31, 2021
Slide 1: The World's Second Largest Bond Market Is Now Open
KBND 5/31/2021 The World’s Second Largest Bond Market Is Now Open Overview of the KraneShares Bloomberg Barclays China Bond Inclusion ETF (ticker: KBND) 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. 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 provid
Slide 3: KBND Introduction
Introduction Investment Strategy: KBND is benchmarked to the Bloomberg Barclays China Inclusion Focused Bond Index, which is designed to KBND track the performance of China’s onshore renminbi-denominated bond market. The Fund seeks to invest at least 80% of its assets in a basket of fixed income sec
Slide 4: Bloomberg Barclays China Bond Inclusion
Index Inclusion Bloomberg Barclays China Bond Inclusion • On January 31, 2019, Bloomberg announced that China’s RMB-denominated government and policy bank bonds would be added to the Bloomberg Barclays Global Aggregate Index. • Inclusion began in April of 2019 and was concluded at the end of 2020. •
Slide 5: The RMB-denominated bonds included in Bloomberg Barclays' indexes
Index Inclusion The RMB-denominated bonds included in Bloomberg Barclays’ indexes • 484 onshore RMB-denominated bonds are included in Bloomberg Barclays’ indexes with a total market value of $5.34 trillion, average modified duration of 3.54 years, and an average yield to maturity of 2.65%1. • Curren
Slide 6: Fast pace of China government bond inclusion
Index Inclusion The fast pace of China government bond inclusion reflects the underlying investment opportunity it offers. China has gone from having no representation in the EM Government Bond Index to being the top issuer. In 2019, China replaced South Korea as the top issuer in the index by weigh
Slide 7: China's weight in the Global Aggregate Index
Index Inclusion China’s weight has increased to 7% of the Global Aggregate Index, and the Chinese RMB has become the fourth- largest currency component.1 Inclusion of the Chinese bond market in Bloomberg Barclay’s leading fixed income indexes is expected to drive $150 billion of fund inflows2 into C
Slide 8: JP Morgan and FTSE Russell inclusion of onshore Chinese bonds
Index Inclusion In addition to Bloomberg’s inclusion, JP Morgan has included and FTSE Russell will be including onshore Chinese bonds in their indexes for the first time. JP Morgan FTSE Russell February, 2020 to November, 2020 October, 2021 to October, 2024 Inclusion Type: Sovereign Inclusion Type:
Slide 9: A Brief History of China's Bond Market
History A Brief History of China’s Bond Market The history of China’s bond market goes back to the 19th century. However, it was not until 1951 that the Chinese developed a market for debt that resembled modern bond markets. 2020 – Leading the world in environmentally conscious business 1988 – A sec
Slide 10: Yields on China's government bonds vs developed markets
Investment Opportunity Yields on China’s government bonds are higher than most developed world government debt. Sovereign Curves 4 3.5 3 2.5 Yield to Maturity (%) 2 1.5 1 0.5 0 -0.5 -1 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 12Y 15Y 20Y 25Y 30Y Tenor China USA Japan Germany UK Data from Bloomberg as of 3/31/
Slide 11: 10-Year Real Yield To Worst
Investment Opportunity In real terms, yields on China’s government bonds are also attractive compared to their emerging Asian peers and China has a higher sovereign credit rating. Real Yields on Government Debt Moody’s Sovereign Country 2 Rating 1.5 China A1 1 10-Year Real Yield To Worst 0.5 Vietnam
Slide 12: Low correlations to other major government bond markets
Investment Opportunity China’s government bonds exhibit low correlations to other major government bond markets. Over the past five years, China’s government bonds have exhibited a correlation of under 15% to government bonds issued by the US, Japan, and Germany. Correlation* Matrix China Gov. Japan
Slide 13: Historical Evolution of CNY Dynamics
Currency Historical Evolution of CNY Dynamics & Reasons for a Stable Outlook USD/CNY Spot Rate • The RMB steadily depreciated against the dollar for much of the 2 1980s and 1990s, as China gained its competitive export edge. • In 1997, a peg to the dollar was initiated at 8.3 CNY for every 3 dollar
Slide 14: CNY volatility among Asian emerging market currencies
Currency The Chinese Onshore Renminbi (CNY) had the third lowest volatility among Asian emerging market currencies in 2020. Asian Emerging Market Currencies by 2020 Volatility 10 9 USD Exchange Rate Standard Deviation* (%) 8 7 6 5 4 3 2 1 0 Indonesian Korean Won Pakistani Rupee Indian Rupee Thai Bah
Slide 15: Government Bond Risk/Return
Risk/Return Investors are well compensated for investing in China’s government bonds compared to those issued by many highly indebted European governments. • S&P currently rates China as an A+ sovereign issuer1 thanks to its steadily maintained foreign reserves, which totaled over $3 trillion at the
Slide 16: Resilience during market turmoil
Risk/Return China’s government bonds have proven resilient in times of general market turmoil and bond market stress. • The global COVID-19 pandemic in 2020 caused Government Bond Yields During Coronavirus Outbreak a selloff in equities and flight to the safety of 3.5 government bonds. 3 • Many cent
Slide 17: Stable yields and diversification benefits
Risk/Return As yields have climbed globally over the last six months, yields in China have remained relatively stable, reflecting the potential diversification* benefits of owning China within a global bond portfolio. 10-Year Yield & 6-Month Change 3.5 3.2 3 2.5 2 1.7 1.5 % 1.1 1 0.8 0.6 0.5 0.2 0.0
Slide 18: China's bond market weighting in broad indexes
Availability China’s bond market is the second largest in the world, yet its weighting in broad indexes is not reflective of the country’s economic importance. Top Three Bond Markets Top 10 Countries in the Bloomberg Barclays Global 50 Treasuries Index 46.2 30 45 40 25 35 20 % Weight 30 Trillions of
Slide 19: Growth of China government bond issuance
Availability Issuance in China’s government bond market has increased significantly since 2017. China Treasury & State-Backed Issuance 12 500 450 10 Amount Outstanding ( Trillions of USD) 400 # of Government-Owned Issuers 350 8 300 6 250 200 4 150 100 2 50 0 0 2017 2018 2019 2020 Amount Outstanding
Slide 20: Bloomberg Barclays China Inclusion Focused Bond Index breakdown
Availability The Bloomberg Barclays China Inclusion Focused Bond Index tracks securities of various maturities issued by the central government (treasuries), policy banks, government-related entities, and corporations. Breakdown by Issuer Type Breakdown by Maturity Corporates 8% 10+ 6% Policy Banks
Slide 21: KraneShares Bloomberg Barclays China Bond Inclusion ETF
Fund Details Data as of 5/31/2021 Top 10 Index Constituents as of % 5/31/2021 Constituents are subject to Listing Exchange NYSE change. KraneShares Bloomberg Barclays China Bond CUSIP 500767702 CHEVBK 3.45 03/24/24 4.13 Inclusion ETF* ISIN US5007677025 POSABK 3.3 10/28/26 2.73 Total Annual Fund Oper
Slide 22: Term Definitions
Term Definitions Yield To Maturity: The total anticipated return on a bond if the bond is held until it matures. Yield To Worst: The lowest possible return on a bond that can be received if the bond operates fully within the terms of its contract without defaulting. Average Weighted Maturity: A calc
Slide 23: 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