Liquid Alternatives: The KraneShares ESG China ETF Lists in London

February 5, 2020 | Fund Updates, Liquid Alternatives
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The ETF has an expense ratio of 0.4%.

Asset managers Kraneshares believe “the relationship between the US and China will be the most important economic partnership of our lifetimes.”

They specialize in China-facing ETFs, launched the KraneShares MSCI China ESG Leaders UCITS ETF (KESG).

The London Stock Exchange-listed ETF is a China equity ETF with an environmental, social and governance (ESG) emphasis.

The new fund is the answer to the demand for an ETF that combines the twin preferences for Chinese equities and responsible investing, according to ETF STREAM.

“We have seen a lot of investor demand for a China-focused ESG UCITS ETF,” said Jonathan Krane, CEO of KraneShares. “We are proud to partner with MSCI, a global leader in ESG indexing, to deliver the KraneShares MSCI China ESG Leaders UCITS ETF (KESG) to our clients.”

KraneShares MSCI China ESG Leaders UCITS ETF (KESG)

The ETF has an expense ratio of 0.4%.

It tracks the MSCI China ESG Leaders 10/40 index, a capitalization-weighted index. It provides exposure to companies with high Environmental, Social and Governance ratings relative to their sector peers.

The Index consists of large and mid-cap companies domiciled in China. KESG’s index provider, MSCI, is the top provider of ESG, Socially Responsible Investment (SRI) and corporate governance indexes based on a survey of global institutions.

Furthermore, the Index is an amalgam of high-growth Chinese companies viewed through the lens of social responsibility. According to ETFExpress, the index has outperformed the standard MSCI China Index by 58% since inception.

The 10/40 concentration indicator signifies that each group is capped at 10%, and all group entities with a weight of more than 5% should not exceed 40% of the index by weight.

Current performance of Chinese ETFs

China-themed ETFs have been under pressure since the coronavirus outbreak, with concerns that it will affect China’s economic growth.

On Tuesday, however, these ETFs bounced back on news that the People’s Bank of China injected billions of dollars into the financial system in an attempt to offset the potential slowdown:

  • VanEck Vectors ChinaAMC CSI 300 ETF (NYSEArca: CNXT) +7.9%,
  • KraneShares Bosera MSCI China A ETF (NYSEArca: KBA) +6.1%, and
  • Xtrackers Harvest CSI 300 China A-Shares ETF (NYSEArca: ASHR) +5.8%

Related Story:  Liquid Alternatives: Short the Pandemic! Buy an Inverse China ETF

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