Solactive EM consumer technology index to underlie new KraneShares ETF

Oct 25th, 2017 | By | Category: Equities

Frankfurt-based index provider Solactive has launched the Solactive Emerging Markets Consumer Technology Index. The index will underlie the KraneShares Emerging Markets Consumer Technology Index ETF (KEMQ), which has been launched on NYSE Arca.

New Solactive EM consumer technology index to underlie KraneShares ETF

The Solactive Emerging Markets Consumer Technology Index has returned 21.0% per annum since 13 June 2012.

Solactive notes the index is aimed at investors looking to gain access to the growing role of internet technology and e-commerce in emerging markets. The index tracks technology-related shares which have a minimum three-month average daily trading volume of $1 million, and a minimum market cap of $1 billion.

Timo Pfeiffer, head of research at Solactive, commented: “The market for consumer technology has experienced significant success on a global level, with considerable growth coming from emerging markets due to increasing purchasing power in these regions. The Solactive Emerging Markets Consumer Technology Index allows investors to take advantage of these developing trends while limiting exposure to individual companies.”

The index selects 50 companies from 26 eligible countries within the emerging markets universe whose primary business is internet retail, payment processing, and software for internet and e-commerce transactions, among others.

The largest ten companies receive a weight of 3.5% each, the next 20 largest receive a weight of 2.5% each, and the final 20 receive a weight of 0.75% each. The composition of the index is adjusted annually with a quarterly allowance for new IPOs.

The index is denominated in US dollars. The most represented countries are China, South Korea and Brazil with weights of 56.8%, 11.5% and 7.6% respectively.

Using back-tested data, the index has returned 21.0% per annum with an annualized volatility of 17.8%, between 13 June 2012 and 24 October 2017.

Source: Solactive.

Brendan Ahern, chief investment officer at KraneShares, said: “We are very pleased to partner with Solactive to deliver the index for our KraneShares Emerging Markets Consumer Technology ETF. The index development team was extraordinarily flexible in designing the index to match our views on the emerging markets consumer technology sector. For those investors interested in learning more about the KEMQ ETF and the corresponding Solactive index, we will be hosting a live webinar on Wednesday 1 November at 11:00am EST.”

KEMQ has a total expense ratio (TER) of 0.79% due to a contractual fee waiver in place until at least August 2018. Its gross expense ratio is 0.80%.

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