Industry Updates

KraneShares shuts China bond and A-Shares 50 ETFs

Due to low assets under management

Theo Andrew

A man in front of red stock exchange board Huaibei, China

KraneShares is set to close a China bond and a China A-Share ETF due to low assets under management (AUM).

In a shareholder notice, the group said the KraneShares MSCI A 50 Connect UCITS ETF (KA50) and the KraneShares Bloomberg China Bond Inclusion UCITS ETF (KBND) will close on 24 May.

KA50 launched in June 2019 and housed $2.1m AUM while KBND launched a year later and has $1.9m AUM.

The group said the net asset value of the ETFs has fallen “below the minimum amount specified in the prospectus”.

“We hereby give you notice of the decision of the directors to terminate the ETF[s] on 24 May 2024,” it said.

The closure comes two and a half years after the group switched the index on KA50 to the first index to offer fully recognised futures contracts for Stock Connect-eligible A-Shares.

It meant the ETF switched from tracking 483 companies to 50 large-cap stocks listed in Shanghai and Shenzhen, while offering a high correlation to China A-Shares benchmark.

Last October, the group launched the KraneShares ICBSS S&P China 500 UCITS ETF after merging with the ICBC Credit Suisse AM’s ICBCCS S&P China 500 UCITS ETF (CHIN).

Despite a dismal couple of years, investors are betting on pockets of recovery in the Chinese market as regulators ease rules and local governments offer additional support.

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