KraneShares Launches Single-Stock Levered ETF Suite With 2X Investment Exposure to Temu Parent PDD Holdings (KPDD) and Alibaba (KBAB)

/EIN News/ -- NEW YORK, March 12, 2025 (GLOBE NEWSWIRE) -- Krane Funds Advisors (“KraneShares”), an asset management firm known for its global exchange-traded funds (ETFs), today announced the launch of its Single-Stock Levered ETF Suite. The first ETFs in the Suite are the KraneShares 2X Long PDD Daily ETF (Ticker: KPDD) and the KraneShares 2X Long BABA Daily ETF (Ticker: KBAB), which both listed today.

KPDD and KBAB seek daily investment results, before expenses and fees, of 2 times (200%) the daily percentage change of the US listings or American Depositary Receipts (ADRs) of Temu parent company PDD Holdings and Alibaba, respectively.

PDD Holdings is the world’s fourth-largest E-Commerce retailer, operating in over 19 countries. PDD pioneered the rise of social-driven E-Commerce and has reshaped global retail through its international platform Temu, which surpassed Amazon in monthly active users and achieved $50 billion in annual gross merchandise value in 2024.¹

Alibaba is the world’s third-largest E-Commerce retailer with a diversified business that spans E-Commerce, artificial intelligence (AI) & cloud computing services, logistics, payments & financial technology, media, and local services. Alibaba’s stock has seen recent positive momentum thanks to the launch of its industry-leading Qwen2.5 series large language model (LLM) and a new strategic partnership with Apple to integrate AI features in new iPhones sold in China.

Both companies were founded amid the boom in China’s consumer economy and boast higher average historical annual revenue growth rates than many US-based counterparts, including Amazon.² Both companies are also long-time top holdings in the KraneShares CSI China Internet ETF (Ticker: KWEB): PDD has a current weight of 6.51% and Alibaba has a current weight of 12.45%, as of March 11, 2025; holdings are subject to change.

“China Internet continues to be an important global growth theme,” said James Maund, KraneShares Head of Capital Markets. “Our Single-Stock Levered ETF Suite provides a convenient way for bullish investors to gain levered exposure to top companies, including the largest China internet stocks.”

For more information on the KraneShares Single Stock Levered ETFs, please visit https://kraneshares.com/kpdd or https://kraneshares.com/kbab/ or consult your financial advisor.

Investors should be aware that they can lose their entire investment. Single-stock ETFs, unlike traditional ETFs that diversify across a range of stocks, focus solely on the performance of a single stock, significantly increasing investment risk. KraneShares ETFs aim for daily investment results that match 2x the daily performance of the underlying stock. Investors should be aware that returns may diverge from the stock's actual performance if held for more than a day.

Due to their leveraged nature, these funds require close monitoring, as they can magnify both potential gains and losses. A flat performance of the underlying stock may lead to a loss, and in certain scenarios, these funds can incur losses even when the stock price fluctuates positively or negatively over several days. Therefore, they are not suitable for every investor and are specifically intended for knowledgeable individuals who grasp the mechanics of leveraged investing and are willing to actively manage risks. Understanding volatility is essential, as minor stock movements and increased volatility can result in returns that significantly deviate from the expected target.

About KraneShares

KraneShares is a specialist investment manager focused on China, Climate, and Alternatives. KraneShares seeks to provide innovative, high-conviction, and first-to-market strategies based on the firm and its partners' deep investing knowledge. KraneShares identifies and delivers groundbreaking capital market opportunities and believes investors should have cost-effective and transparent tools for attaining exposure to various asset classes. The firm was founded in 2013 and serves institutions and financial professionals globally. The firm is a signatory of the United Nations-supported Principles for Responsible Investment (UN PRI).

Citation:

1. Wang, Yimin. “Temu overtook Amazon as the most used global e-commerce platform,” Dao Insights. January 28, 2025.
2. Data from Bloomberg for the period 2014 to 2024.

Important Notes:

Carefully consider the Funds’ investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Funds’ full and summary prospectus, which may be obtained by visiting: www.kraneshares.com/kpdd or www.kraneshares.com/kbab. Read the prospectus carefully before investing.

Risk Disclosures:

Investing involves risk, including possible loss of principal. There can be no assurance that a Fund will achieve its stated objectives. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index.

This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change. Certain content represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results; material is as of the dates noted and is subject to change without notice.

The Funds may invest in derivatives, which are often more volatile than other investments and may magnify Funds' gains or losses. Derivatives (i.e., futures/forward contracts, swaps, and options) are contracts that derive their value from the performance of underlying assets. The primary risk of derivatives is that changes in the assets’ market values and the derivatives may not be proportionate, and some derivatives can have the potential for unlimited losses. Derivatives are also subject to liquidity and counterparty risks. The Funds are subject to liquidity risks, meaning that certain investments may become difficult to purchase or sell at a reasonable time and price. If transactions for these securities are large, it may not be possible to initiate them, which may cause the Funds to suffer losses. Counterparty risks are the risks of loss in the event that the counterparties to an agreement fail to make required payments or otherwise comply with the terms of the derivatives.

The Underlying Stocks are exposed to numerous risks that can impact their revenues and viability, such as price volatility, management, inflation, global economic conditions, and natural disasters. Their performances may be influenced by trends in commerce, cloud computing, international trade policies, and regulatory changes. The Fund’s daily returns rely on the Underlying Stocks' performances and volatility. Issuer-specific factors may increase Fund investment volatility compared to the overall market. BABA faces risks from competition in e-commerce, economic uncertainties, demand declines, revenue concentration, geopolitical events, intellectual property issues, exchange rates, reliance on third-party manufacturing, shortages, cybersecurity threats, system failures, rising costs, government regulations, compliance expenses, litigation, taxes, debt, and talent retention. The Funds aim for daily investment results of 200% of the daily percentage changes of the Underlying Stocks. Their performances over longer periods will likely differ from the Underlying Stocks due to compounded returns, which significantly affect leveraged funds. If the Underlying Stocks perform poorly, the dollar losses for shareholders will be smaller if their investments have already decreased. Conversely, if the stocks perform well, future losses will be larger as the investment values have increased. Compounding effects become more pronounced with higher volatility and longer holding periods, impacting shareholders differently based on their investment durations and the stocks' volatility. Various factors can impact the Funds' correlations with Underlying Stocks, and achieving high correlations is not guaranteed. If the Funds fail to achieve correlation, they may not meet their investment objectives, with NAV changes varying significantly from 200% of the Underlying Stocks' changes. To maintain correlations, the Funds attempt daily rebalancing for consistent exposures. Major deviations can increase leverage risks. Market disruptions and volatility can hinder the Funds' ability to adjust. Target exposures fluctuate, making perfect 200% exposures unlikely, especially on volatile days. Other elements, like fees and market conditions, can also affect correlations. The Funds may change positions for tax efficiency, which could harm correlations. Large asset movements or trading discrepancies may lead to under- or overexposures, reducing the Funds' ability to meet their daily objectives. The Funds use leverage to gain investment exposure beyond their net assets, leading to potential greater losses in adverse conditions than non-leveraged funds. A decline in the Underlying Stocks' daily performance can magnify losses, decreasing the Funds' values by 2% for each 1% drop, excluding costs. Losses could exceed net assets if the Underlying Stocks fall over 50%. Due to limited investments, the Funds may need to limit or suspend the creation or redemption of Creation Units. During these times, shares might trade at significant premiums or discounts to their net asset values. If creations are halted, large redemptions could force the Funds to sell securities at unfavorable prices, increasing costs and taxable distributions to shareholders. The Underlying Stock is listed on an exchange, but an active trading market isn't guaranteed, and trading can be halted. A halt in the Underlying Stock usually leads to a halt in the Fund's shares. Trading may stop due to market conditions or exchange decisions, and halts can occur from extraordinary volatility under circuit breaker rules. Extended trading halts may hinder the Fund's ability to arrange necessary swaps for its investment strategy.

Narrowly focused investments typically exhibit higher volatility. The Funds' assets are expected to be concentrated in a single stock. The securities or futures in that concentration could react similarly to market developments. Thus, the Funds are subject to loss due to adverse occurrences that affect that concentration. In addition to the normal risks associated with investing, investments in smaller companies typically exhibit higher volatility. KPPD and KBAB are non-diversified.

The Chinese economy is an emerging market, vulnerable to domestic and regional economic and political changes, often showing more volatility than developed markets. Companies face risks from potential government interventions, and the export-driven economy is sensitive to downturns in key trading partners, impacting the Fund. U.S.-China tensions raise concerns over tariffs and trade restrictions, which could harm China’s exports and the Fund. China’s regulatory standards are less stringent than in the U.S., resulting in limited information about issuers. Tax laws are unclear and subject to change, potentially impacting the Fund and leading to unexpected liabilities for foreign investors. Fluctuations in currency of foreign countries may have an adverse effect to domestic currency values. The Fund is new and does not yet have a significant number of shares outstanding. If the Fund does not grow in size, it will be at greater risk than larger funds of wider bid-ask spreads for its shares, trading at a greater premium or discount to NAV, liquidation and/or a trading halt.

ETF shares are bought and sold on an exchange at market price (not NAV) and are not individually redeemed from the Fund. However, shares may be redeemed at NAV directly by certain authorized broker-dealers (Authorized Participants) in very large creation/redemption units. The returns shown do not represent the returns you would receive if you traded shares at other times. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns. Beginning 12/23/2020, market price returns are based on the official closing price of an ETF share or, if the official closing price isn't available, the midpoint between the national best bid and national best offer ("NBBO") as of the time the ETF calculates the current NAV per share. Prior to that date, market price returns were based on the midpoint between the Bid and Ask price. NAVs are calculated using prices as of 4:00 PM Eastern Time.

The KraneShares ETFs and KFA Funds ETFs are distributed by SEI Investments Distribution Company (SIDCO), 1 Freedom Valley Drive, Oaks, PA 19456, which is not affiliated with Krane Funds Advisors, LLC, the Investment Adviser for the Funds, or any sub-advisers for the Funds.

Contact:
KraneShares Investor Relations
info@kraneshares.com