KraneShares MSCI China Clean Technology Index ETF · AMEX:KGRN
KraneShares MSCI China Clean Technology Index ETF — KraneShares Emerging Markets Consumer Technology ETF — Investor Presentation (March 2019)
25 slides from KraneShares MSCI China Clean Technology Index ETF's investor presentation, Mar 31, 2019
Slide 1: The Emerging Market Consumer Internet & E-Commerce Opportunity
KEMQ 3/31/2019 The Emerging Market Consumer Internet & E-Commerce Opportunity An Overview of the KraneShares Emerging Markets Consumer Technology ETF (Ticker: KEMQ) 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: KEMQ Investment Strategy
Investment Strategy: KEMQ KEMQ seeks to track the Solactive Emerging Markets Consumer Technology Index. The Index selects companies from 26 eligible countries within emerging markets whose primary business or businesses are internet retail, internet software/services, purchase, KraneShares payment p
Slide 4: Growth in emerging markets driven by the Three P's
Transformational growth in emerging markets is driven by the “Three P’s” Population Penetration Performance The middle class consumer in Internet adoption is the catalyst Technology firms across the Emerging Markets will drive for rapid innovation, and emerging markets are taking global demand. faci
Slide 5: Emerging markets represent a huge consumer market opportunity
World Bank 2017 GDP, by PPP Ranking Economy (millions of international dollars) CHN 1 China 23,300,783 USA 2 United States 19,390,604 Emerging markets represent a huge consumer IND 3 India 9,453,706 market opportunity JPN 4 Japan 5,487,161 DEU 5 Germany 4,187,583 • In order to fairly compare the con
Slide 6: Middle class consumption could reach 50% of global consumption by 2030
According to a study from the Brookings Institution, middle class consumption could reach 50% of total global consumption by the year 2030, more than doubling from 2015. Middle Class Consumption – Top 10 Countries (billions of 2011 PPP$ and global share) 2015 2020 2030 1 United States 4.7 13% China
Slide 7: Internet penetration across emerging markets
The rise of consumer technology goes beyond China to broader emerging markets as more of the developing world gets internet access for the first time. Internet penetration rates vary across emerging markets creating distinct Within major emerging market countries internet usage has grown by an growt
Slide 8: 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 9: China's leapfrogging effect from rapid technology adoption
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 9
Slide 10: Money and the internet have become virtually inseparable
Money and the internet have become virtually inseparable Apps like Tencent’s WeChat and Alibaba’s Alipay allow users to do everything from buy a coffee, hail a cab, to make investments in wealth management products, all from a smart phone. WeChat users can invest in mutual funds through the same app
Slide 11: Three core themes from investing in Chinese markets
Through our experience investing in the Chinese markets we identified three core themes: • Internet adoption is expanding rapidly within China • Domestic consumption and retail sales are steadily increasing and frequently taking place online • The China E-Commerce sector has consistently outperforme
Slide 12: Proliferation of e-commerce seen firsthand in China
Through our trips to China we saw the proliferation of e-commerce firsthand. Over 40 billion packages were delivered in China in 2017, an increase of 28% from the previous year 1. JD.com warehouse employees prepare same-day delivery Unlike competitor Alibaba, JD.com owns its own logistics network an
Slide 13: 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 Internet Companies3 By Market Cap1 By Market Cap2 Alphabet $374.4B Amazon $891.1B Toutiao (Bytedance) $75.0B Amazon $182.5B Alp
Slide 14: 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 15: Alibaba has 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 16: Naspers: global internet and entertainment group
Naspers is a global internet and entertainment group that has grown into one of the largest technology investors in the world. The company’s investments span the globe and are organized into six business areas: Classifieds, Payments, B2C E-Commerce, Ventures, Video Entertainment, and Media¹. Naspers
Slide 17: Emerging market internet companies around the world
Emerging market internet companies around the world 17
Slide 18: Solactive Emerging Markets Consumer Technology Index filtering process
In order to deliver a precise representation of the emerging markets consumer technology opportunity, we worked with Solactive to develop the Solactive Emerging Markets Consumer Technology Index. Filtering Process for Index Constituent Selection 26 eligible countries: Argentina, Brazil, Chile, Colom
Slide 19: KEMQ sector and country breakdown vs MSCI Emerging Markets
Our index filtering process results in a very different sector and country breakdown than traditional emerging markets. KEMQ Sector Breakdown KEMQ vs MSCI Emerging Markets Index Sector Breakdown 60% Consumer Discretionary 50% 38.05% 40% 30% % 20% Information Technology 8.60% 10% Financials 0% Commun
Slide 20: KEMQ top holdings by country
The KraneShares Emerging Markets Consumer Technology ETF (Ticker: KEMQ) tracks a variety of companies throughout key emerging market countries Top countries and Top Holdings in country Weight Company Logo Company description weight within KEMQ NetEase, Inc. operates an interactive online community i
Slide 21: KraneShares Emerging Markets Consumer Technology ETF fund details
Fund Details As of 3/31/2019 Top Ten Holdings as of 3/31/2019 % of The Fund’s Holdings Are Subject to Change. Fund Primary Exchange NYSE NEW ORIENTAL EDUCATIO-SP ADR 4.10 KraneShares Emerging Markets Cusip 500767876 JD.COM INC-ADR 3.72 Consumer Technology ETF (NYSE: KEMQ) Total Annual Fund Operating
Slide 22: Key Takeaways
Key Takeaways • Our China experience has allowed us to identify and deliver extraordinary opportunities across emerging markets • The three P’s will shape buying behavior for decades to come o Population: The middle class consumer o Penetration: Rapid internet adoption o Performance: The growth of t
Slide 23: Index and Term Definitions
Index Definitions: CSI Overseas China Internet Index: Represents the Chinese internet companies listed in overseas markets (New York and Hong Kong), in order to measure the performance of the Chinese internet companies listed outside mainland China. MSCI China Index: The MSCI China Index captures la
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: Data disclaimer and forward-looking statements
Although Krane Funds Advisors LLC and its affiliates (“Krane”) shall obtain data from sources that Krane considers reliable, all data contained herein is provided “as is” and Krane makes no representation or warranty of any kind, either express or implied, with respect to such data, the timeliness t
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