KRANESHARES CSI CHINA INTERNET UCITS CLASS GBP ETF

Issuer: KraneShares

Asset Class: Equity

TER: 75bps

Trading Currency: GBP

Pays Income: False

Listing Date: 01 Oct 2020

Ticker: KWBP

ISIN: IE00BMW13836

This financial instrument offers targeted exposure to the dynamic and rapidly growing Chinese internet sector. The portfolio is composed of publicly traded, China-based companies whose primary business activities are focused on the internet and internet-related technologies. This includes key areas such as e-commerce platforms, social media networks, online search engines, web-based gaming, and cloud computing services. By focusing on these companies, the investment provides a way to participate in the growth of China's burgeoning digital economy, which benefits from the world's largest base of internet users. It captures the essence of China's technological advancement and its shift towards a more consumer-driven economic model.

The investment thesis is underpinned by several strong secular growth trends within China. The nation's expanding middle class possesses increasing disposable income, which fuels consumption on online retail and digital entertainment platforms. Furthermore, rising internet and smartphone penetration, particularly in less-developed urban and rural areas, continues to add millions of new users to these digital ecosystems. Chinese internet companies are often at the forefront of global innovation, especially in areas like mobile payments, artificial intelligence applications, and logistics, creating significant competitive advantages. This positions them to capitalize on the ongoing digital transformation of nearly every aspect of Chinese society and commerce.

Investing in this theme provides concentrated access to what is often termed China's "new economy," offering a different exposure profile compared to broader Chinese market indices, which are often heavily weighted towards state-owned enterprises in traditional sectors like banking and energy. This targeted approach allows for pure-play participation in high-growth technology and consumer-focused businesses. However, this concentration also brings specific risks. The sector is subject to significant regulatory oversight from the Chinese government, which can change rapidly and impact company operations and valuations. Additionally, as a single-country, single-sector investment, it is susceptible to country-specific economic slowdowns and geopolitical tensions.