KLXY Profile
The KraneShares Trust focuses on replicating a global index that encompasses companies involved in the luxury sector across developed markets. This index includes firms engaged in diverse areas such as travel and leisure, high-end goods, premium apparel, and luxury products. The selection process for index constituents involves rigorous screening based on criteria such as minimum market capitalization, trading volume, and country of listing. Eligible securities are ranked by market capitalization, and the top 25 are selected to form the index.
The index employs a modified market-capitalization weighting methodology. It assigns higher weights to the leading companies, with the largest security receiving a 10% weight, and the next four largest securities receiving incrementally lower weights. The remaining securities are capped at a maximum weight of 4.5% to ensure a balanced representation across the index. This approach aims to reflect the relative importance of top-performing luxury firms while maintaining diversification.
Although the fund primarily targets investments within the United States, it is designed to allocate at least 40% of its assets to foreign markets or companies with significant international business activities. This global perspective allows investors to gain exposure to the broader luxury sector beyond domestic borders, capturing growth opportunities in various international markets.
The index undergoes a semi-annual rebalancing and an annual reconstitution to ensure it accurately reflects the evolving luxury market landscape. This periodic adjustment helps maintain the index's alignment with current market conditions and the shifting dynamics within the luxury sector. By investing in this fund, investors can access a diversified portfolio of leading luxury companies while benefiting from the strategic adjustments made to the index throughout the year.
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