KraneShares MSCI All China Health Care Index ETF · AMEX:KURE
KraneShares MSCI All China Health Care Index ETF — KraneShares — Debt Investor Presentation (June 2020)
15 slides from KraneShares MSCI All China Health Care Index ETF's debt investor presentation, Jun 30, 2020
Slide 1: High Income Opportunity from China's USD Bond Market
KCCB 6/30/2020 High Income Opportunity from China’s USD Bond Market An Overview of the KraneShares CCBS China Corporate High Yield Bond USD Index ETF (Ticker: KCCB) 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: KCCB Investment Strategy
Investment Strategy: KCCB KCCB seeks to provide investment results that, before fees and expenses, track the price and yield performance of the Solactive USD China Corporate High Yield Bond Index. The Index seeks to track the performance of outstanding high KraneShares CCBS yield debt securities den
Slide 4: CCB Quick Facts
CCB Securities Ltd (CCBS), an overseas asset management platform owned by China Construction Bank (CCB), is the co-manager of KCCB. CCB Quick Facts • Headquartered in Beijing with offices worldwide • Second largest bank in the world by assets1 • Established in 1954 • Investment and Retail banking di
Slide 5: China has the largest USD denominated bond market in Asia
China has the largest USD denominated bond market in Asia. Demand from yield seeking investors created a booming USD denominated bond market for Chinese companies. Strong issuance provides a solid capacity for investors to benefit from this growing credit market. China USD Denominated High Yield Cor
Slide 6: Yields on China corporate high yield debt are an outlier in Asia
Yields on China corporate high yield debt are an outlier in Asia. China’s relatively low inflation rate means that real yields on high yield corporate debt are an outlier in Asia. Asia High Yield Corporate Bond Real Yields* 7 6 5 Yield (%) 4 3 2 1 0 China Malaysia Indonesia Mongolia Macau Thailand V
Slide 7: A strong economy means a stable credit market
A strong economy means a stable credit market. China’s economic growth has been relatively stable over the past few years • China has a good track record for maintaining stable economic growth. Real GDP Growth Rates 16 14 12 10 8 6 4 2 0 -2 -4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2
Slide 8: China high yield bonds offer comparatively higher yields and lower modified durations
China high yield bonds offer comparatively higher yields and lower modified durations. The China high yield bond market has a higher yield and lower modified duration1 compared to other fixed income markets like the US and Europe. Global Fixed Income Yield and Modified Duration 10 9 8 7 Asia USD Hig
Slide 9: The China credit bubble is a misconception
The China credit bubble is a misconception. Deleveraging in 2017 created a stable credit market in 2018. China’s corporates, especially SOEs1, own abundant deposits, debt minus deposit shows a more reasonable leverage level. China Corporate Leverage Ratio 250 200 150 % 100 50 0 2005 2006 2007 2008 2
Slide 10: Low to negative correlations to the global bond market
Over the past 5 years, China USD-denominated high yield bonds have had low to negative correlations to the global bond market. China Short- Asia USD 10-Year US Asia USD High Term China USD High Correlation Matrix US Aggregate* EU Aggregate* Investment Treasury* Yield Commercial Yield* Grade* Paper 1
Slide 11: Exposure to government-related debt may drive down default risk
Exposure to government-related debt may drive down default risk. China’s central government provides support and, at times, default protection for companies providing public or strategic services. • Moody’s affirmed China’s central government’s A1 sovereign rating in 2019 with a stable outlook. The
Slide 12: KraneShares CCB China Corporate High Yield Bond USD Index ETF (NYSE: KCCB)
Ticker KCCB Index Name Solactive USD China Top Ten Holdings as of 6/30/2020 % of Fund Corporate High Yield Excluding cash. The Fund’s Holdings Are Subject to Bond Change KraneShares CCB China Corporate High CKINF 5 7/8 PERP 5.19 Primary Exchange NYSE Yield Bond USD Index ETF (NYSE: KCCB) Total Annua
Slide 13: 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 Index: captures large and mid cap representation across 23 Emerging Markets (EM) cou
Slide 14: Important Notes (continued)
Important Notes (continued) Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Although Krane Funds Advisors LLC and its affiliates (“Krane”)
Slide 15: Important Notes
Important Notes Carefully consider the Funds’ investment objectives, risk factors, charges and expenses before investing. This material must be preceded or accompanied by a prospectus. Read the prospectus carefully before investing. ETF shares are not redeemable with the issuing fund other than in l