KLIP Profile
The KraneShares China Internet and Covered Call Strategy ETF is designed to provide investors with exposure to Chinese internet companies while employing a strategy that enhances income through covered call options. Under normal market conditions, the fund invests at least 80% of its net assets in securities that are components of the CSI Overseas China Internet Index or in financial instruments that replicate the economic characteristics of these index components. The fund also actively writes covered call options on the index or on instruments that simulate the characteristics of such options, aiming to generate additional income.
The CSI Overseas China Internet Index focuses on Chinese internet and technology companies listed outside of China, capturing the performance of firms engaged in various sectors of the internet economy. The funds investment strategy involves allocating a significant portion of its assets to the KraneShares CSI China Internet ETF, which tracks the performance of this index. By doing so, the fund gains exposure to a broad range of internet-related companies, including those involved in e-commerce, social media, and digital services.
In addition to its core equity investments, the fund employs a covered call strategy to potentially enhance income. This involves selling call options on the underlying ETF, which allows the fund to collect premiums from option buyers. This strategy can generate additional returns in a flat or moderately rising market, but it may also limit the upside potential of the underlying investments if the index performs exceptionally well.
As a non-diversified fund, the KraneShares China Internet and Covered Call Strategy ETF focuses its investments on a specific sector and strategy. The concentrated approach reflects the fund's dual objective of capturing the growth potential of Chinese internet companies while providing an income stream through the systematic writing of covered call options. This strategy aligns with investors seeking targeted exposure to China's digital economy with an added layer of income generation.
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