An Overview of the KraneShares Global Luxury Index ETF

The Global Luxury Opportunity

KLXY 12/31/2025

Introduction to KraneShares

About KraneShares

Krane Funds Advisors, LLC is a specialist investment manager focused on China, Climate, and Alternative assets. KraneShares seeks to provide innovative, high conviction, and first to market strategies. The firm was founded in 2013 and manages for institutions and individuals globally. The firm is a signatory of the United Nations-supported Principles for Responsible Investment (UN PRI).

Product Suite

China Thematic Equity

• KWEB Internet & E-Commerce*
• KURE Healthcare
• KGRN Clean Technology
• KSTR STAR Market*
• KTEC Hang Seng Tech

China Core Equity

• KBA MSCI China A 50
• KCAI China Onshore Alpha Index

Options Income

• KLIP KWEB Covered Call
• KWIN Wahed Alternative Income

Managed Futures

• KMLM Mount Lucas Managed Futures

Global Equity

• KARS Electric Vehicles & Future Mobility
• AGIX Artificial Intelligence & Technology
• KOID Humanoid & Embodied Intelligence*

EM Equity

• KEMX MSCI Emerging Markets ex China
• KEMQ Emerging Markets Consumer Tech
• KPHO Dragon Capital Vietnam Growth

Levered

• KBAB 2X Long BABA Daily
• KPDD 2X Long PDD Daily
• KMLI 2X Long MELI Daily
• KJD 2X Long JD Daily
• KBDU 2X Long Baidu Daily

Carbon

• KRBN Global Carbon Strategy*
• KEUA European Carbon Allowance
• KCCA California Carbon Allowance

Fixed Income

• IVOL Quadratic Interest Rate Volatility & Inflation Hedge
• BNDD Quadratic Deflation ETF
• KHYB Asia High Income USD Bond
• KCSH Sustainable Ultra Short Duration

US Equity

• KSPY Hedgeye Hedged Equity
• BUYO Man Buyout Beta Index
• KVLE Value Line® Dynamic Dividend Equity
• KIQQ Nasdaq Hedge & Option Income

*Strategy also available in UCITS

Investment Strategy:

KLXY provides exposure to leading developed markets companies from global luxury-related sectors weighted by market capitalization. These companies operate across industries, including leather goods, jewelry, accessories, skincare, cosmetics, beverages, travel, and supercar businesses.

Global Luxury Market Highlights:

• Global luxury companies tend to have resilient pricing power, strong profitability, and high barriers to entry, offering investors potential long-term growth.
• The luxury industry tends to be resilient in economic downturns and inflationary periods, strengthened by longstanding brand reputations and loyal customer bases.
• The global luxury market is projected to reach $570-615 billion by 2030, which is more than double its size in 2020.¹
• Global luxury brands have embraced E-Commerce and digital marketing, broadening their customer base from 400 million in 2022 to an expected 500M by 2030.¹
• China is expected to add more than 71 million people to its growing upper/high-income middle class by 2025, potentially driving future growth of global luxury companies.²
• Post-pandemic international travel rebounded in 2022, as international tourist arrivals more than doubled compared to 2020.³ Rising outbound tourists are likely to boost luxury shopping in duty-free countries.

KLXY features:

• Invested in over 40 of the top global luxury companies by market capitalization, including companies such as LVMH, Hermes, Ferrari, and Pernod Ricard.
• Access to global luxury brands across various key sectors, including luxury goods, skincare, cosmetics, beverages, travel, and vehicles.
• Diversified exposure to developed countries outside of the United States, including France, the United Kingdom, Italy, Switzerland, and Japan.

1. Bain & Company, "Global luxury goods market takes 2022 leap forward and remains poised for further growth despite economic turbulence", Nov 2022. Retrieved 12/31/2025.
2. McKinsey, "2023 McKinsey China Consumer Report: A Time of Resilience", December 2022, Retrieved 12/31/2025.
3. World Economic Forum, "Charted: How international travel bounced back strongly in 2022", May 2023. Retrieved 12/31/2025.

Diversification does not ensure a profit or guarantee against a loss.

One-Stop Solution for Global Luxury Companies

Category	KLXY Sector Exposure	Definition	Examples
Luxury Leather Goods, Jewelry and Accessories	69%	Companies whose business primarily focuses on luxury handbag, apparel, shoes, jewelry, watches, and sunglasses, etc.	LVMHHermesRichemontEssilor LuxotticaKering
Luxury Skincare and Cosmetics	25%	Companies that provides high end skincare products, cosmetics and beauty related products.	L'OréalEstee Lauder
Luxury Travel	2%	Companies that operate resorts and casinos.	Vail Resorts
Luxury Vehicle	4%	Companies that manufacture and distribute luxury cars, planes and yachts, etc.	Ferrari

Data from Bloomberg as of 12/31/2025. Fund holdings are subject to change. See page 14 for top 10 holdings. Excluding Cash. Percentages rounded to the nearest whole number.

KLXY Captures the Most Valuable Global Luxury Brands

• Brand value plays a pivotal role in influencing consumer perceptions, driving demand, and commanding premium pricing.

Most Valuable Global Luxury Brands in 2025

Brand (holding company, KLXY weight %)

• Louis Vuitton (LVMH, 10.34%)
• Hermès (Hermès, 5.96%)
• Chanel (Private)
• Gucci (Kering, 4.40%)
• Cartier (Richemont, 9.59%)
• Dior (LVMH, 10.34%)
• Rolex (Private)
• Tiffany & Co. (LVMH, 10.34%)
• Prada (Prada, 1.30%)
• Fendi (LVMH, 10.34%)

Brand Data from Statista as of 12/31/2025. Company KLXY weights from Bloomberg as of 12/31/2025. Holdings are subject to change.

Diversified Exposure to Developed Countries Outside of the United States

• Country diversification in the luxury sector is essential for mitigating risks associated with market fluctuations, geopolitical uncertainties, and varying consumer preferences.

Region Exposure

• European Developed: 63.02%
• Asian Developed: 6.54%
• American Developed: 29.07%

Country Exposure

• FRANCE: 35%
• UNITED STATES: 29%
• ITALY: 12%
• SWITZERLAND: 10%
• JAPAN: 7%
• DENMARK: 4%
• UNITED KINGDOM: 3%

Data from Bloomberg as of 12/31/2025. Diversification does not ensure a profit or guarantee against a loss.

The Personal Luxury Goods Market Has Nearly Tripled in the Past 20 Years

• During economic downturns and periods of inflation, the luxury sector displays resilience, bolstered by well-established brand reputations and dedicated customer followings

Global Personal Luxury Market Value since 2000

(Values in Euro Billions)

2000: 116 2001: 122 2002: 122 2003: 120 2004: 128 2005: 139 2006: 150 2007: 161 2008: 159 2009: 147 2010: 167 2011: 186 2012: 207 2013: 212 2014: 219 2015: 245 2016: 244 2017: 255 2018: 263 2019: 284 2020: 223 2021: 293 2022: 354 2023: 369 2024: 363

Data from Statista as of 12/31/2024. Retrieved 12/31/2025.

Resiliency of the Luxury Sector

• The outperformance of the luxury sector can be attributed to its loyal customer base, which is comprised of high-net-worth individuals, also known as "true-luxury" consumers.

Luxury Highlights

• According to Bain & Company and Boston Consulting Group, these consumers spend an average of $43,000 per year on luxury goods and experiences, earn an average annual income of $558k, and have over $1 million in wealth.¹
• True-luxury consumers account for 2-5% of total customers but generate 40% of industry sales.¹
• This dynamic underscores a pivotal aspect of the luxury market, where a small cohort of consumers drives a significantly disproportionate share of sales, highlighting the sector's resilience to economic fluctuations.

"True-Luxury" Consumers as % of Total Luxury Customers¹

2-5%

Luxury Industry Sales by "True-Luxury" Consumers¹

40%

1. Data from Bain & Company and Boston Consulting Group as of 1/19/2023. Retrieved 12/31/2025.

LVMH Advertising & Promotion Expenditure

Luxury companies have high advertising and promotion budgets to maintain brand value and pricing power

Advertising & Promotion Expenditure of the LVMH Group World-Wide from 2008 to 2024

(Spending in Million Euros)

2008: 2,031 2009: 1,809 2010: 2,267 2011: 2,711 2012: 3,251 2013: 3,310 2014: 3,484 2015: 4,017 2016: 4,242 2017: 4,831 2018: 5,518 2019: 6,265 2020: 4,869 2021: 7,291 2022: 9,584 2023: 10,221 2024: 9,762

Data from Statista as of 12/31/2025.

E-Commerce and Direct to Customers (DTC) Drive Future Growth of Global Luxury Markets

Global luxury brands have embraced E-Commerce and digital marketing, broadening their customer base from 400 million in 2022 to an expected 500M by 2030.

![Chart showing value of the online personal luxury goods market worldwide from 2004 to 2024, with values increasing from 1.10 billion euros in 2004 to 72.60 billion euros in 2024]

Data from Statista and "Global Online Personal Luxury Goods Market: Market Size, Trends, Opportunities and Forecast By Product Type, Sales Channel, Price Range, Region, By Country: 2020-2030," as of 12/31/2024. Retrieved 12/31/2025.

Emerging Middle Class Creates Massive New Customers

China continues to lead in increasing middle-class households annually, with a significant portion moving up to higher income levels. Forecasts indicate that China will include 71 million more upper-middle and high-income households over the next three years.

Annual household disposable income in China

2020 real RMB

Number of urban households by income group, million

Income Level	Income Range (RMB)	2015	2021	2025E
Upper-middle & high-income	(>160,000)	34	138	209
Middle income	(85,000-160,000)	192	144	114
Lower-middle & lower income	(<85,000)	63	73	63
Total		289	355	386
% of upper-middle & high-income		12%	39%	54%

Source: MGI Insights China macro model

Global Luxury Companies Have Strong Profitability, Robust Quality, and High Barriers to Entry

Top 10 KLXY Holdings

Top 10 KLXY Holdings	Ticker	KLXY Weight (%)	Gross Margin (%)	Return on Equity (%)
LVMH MOET HENNESSY LOUIS VUITTON	MC FP	10.34	67	20
COMPAGNIE FINANCIERE RICHEMONT	CFR SE	9.59	67	13
L'OREAL	OR FP	7.95	74	21
HERMES INTERNATIONAL	RMS FP	5.96	70	28
ESSILORLUXOTTICA	EL FP	5.87	63	6
DECKERS OUTDOOR CORP	DECK US	5.44	58	42
RALPH LAUREN CORP	RL US	4.58	69	29
MONCLER SPA	MONC IM	4.46	78	19
ESTEE LAUDER COMPANIES	EL US	4.44	74	--
TAPESTRY INC	TPR US	4.43	75	10
Total:		63.06%	Average: 69.50%	Average: 20.89%

Data from Bloomberg as of 12/31/2025. Fund holdings are subject to change. Please see end of presentation for definitions.

KraneShares Global Luxury Index ETF

Investment Strategy:

KLXY provides exposure to leading developed markets companies from global luxury-related sectors weighted by market capitalization. These companies operate across industries, including leather goods, jewelry, accessories, skincare, cosmetics, beverages, travel, and supercar businesses.

Fund Details

Data as of 12/31/2025

Fund Information	Details
Primary Exchange	NYSE Arca, Inc.
CUSIP	500767454
ISIN	US5007674543
Total Annual Fund Operating Expense	0.69%
Inception Date	09/06/2023
Distribution Frequency	Annual
Underlying Index	Solactive Global Luxury Select Index
Number of Holdings	31

Top 10 Holdings as of 12/31/2025

Holdings are subject to change.

Company	Ticker	%
LVMH MOET HENNESSY LOUIS VUI	MC	10.34
CIE FINANCIERE RICHEMO-A REG	CFR	9.59
L'OREAL	OR	7.95
HERMES INTERNATIONAL	RMS	5.96
ESSILORLUXOTTICA	EL	5.87
DECKERS OUTDOOR CORP	DECK	5.44
RALPH LAUREN CORP	RL	4.58
MONCLER SPA	MONC	4.46
ESTEE LAUDER COMPANIES-CL A	EL	4.44
TAPESTRY INC	TPR	4.43

KLXY Performance History as of 12/31/2025:

	Cumulative %			Average Annualized %
	3 Mo	6 Mo	Since Inception	1 Yr	3 Yr	5 Yr	Since Inception
Fund NAV	4.63%	10.90%	8.93%	13.90%	–	–	3.75%
Closing Price	4.64%	10.49%	8.56%	13.71%	–	–	3.60%
Underlying Index	4.70%	11.28%	10.14%	14.29%	–	–	4.25%

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. For performance data current to the most recent month end, please visit www.kraneshares.com/klxy.

Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.

LVMH - adapt to changing consumer preferences and trends

• LVMH (Moët Hennessy Louis Vuitton) is a global luxury conglomerate renowned for its extensive portfolio of nearly 100 subsidiaries, encompassing iconic brands across various sectors, including fashion, cosmetics, jewelry, and spirits.

• With subsidiaries like Louis Vuitton, Dior, Fendi, and Bulgari, LVMH maintains a dominant presence in the luxury fashion and accessories market, capitalizing on its diverse range of prestigious brands.

• LVMH's strategic acquisition and management of these subsidiaries exemplify its commitment to preserving brand autonomy while leveraging synergies to enhance innovation, distribution, and customer engagement within the luxury industry.

Primary Business: Luxury

Fund Weight % (12/31/2025): 10.34%

![LVMH brand portfolio showing various subsidiaries organized by category including fashion & leather goods, wines & spirits, perfumes & cosmetics, watches & jewelry, and other activities]

Source: Company Data as of 12/31/2025. Holdings are subject to change.

L'Oréal

• L'Oréal stands as a global powerhouse in the luxury beauty industry, encompassing a rich collection of high-end cosmetics, skincare, haircare, and fragrance brands.

• With names like Lancôme, Yves Saint Laurent Beauty, and Giorgio Armani Beauty under its umbrella, L'Oréal epitomizes sophistication and innovation, catering to diverse beauty needs while maintaining a luxurious touch.

![L'Oréal brand portfolio showing various subsidiaries including luxury and consumer brands such as Lancôme, Giorgio Armani, Yves Saint Laurent, Kiehl's, Garnier, Maybelline, and many others]

Primary Business: Luxury

Fund Weight % (12/31/2025): 7.95%

Source: Company Data as of 12/31/2025. Holdings are subject to change.

Definitions:

The Solactive Global Luxury Index: The Solactive Luxury Index tracks the performance of companies that are operating in the luxury segment. The Index is a net total return index and published in US Dollar.

Price-to-Earnings (P/E): The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS). The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.

Gross Margin %: A company's gross margin is the percentage of revenue after COGS. It is calculated by dividing a company's gross profit by its sales. Remember, gross profit is a company's revenue less the cost of goods sold.

Return on Equity %: Return on equity (ROE) is the measure of a company's net income divided by its shareholders' equity. ROE is a gauge of a corporation's profitability and how efficiently it generates those profits.

The S&P 500 Index: is an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ.

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/klxy. 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 Fund invests in companies in luxury-related sectors that may face intense competition and be dependent on their ability to maintain brand image. These companies may be subject to changes in consumer preferences and the spending of a relatively small segment of the general population, and technologies employed by the companies that may become obsolete. The companies can be especially sensitive to a decline in consumer confidence or any downturns in the broader economy. Demand for luxury products may be seasonal, and incorrect assessment of future demand can lead to overproduction or underproduction, which can impact company profitability.

The Fund is subject to non-U.S. issuers risk, which may be less liquid than investments in U.S. issuers, may have less governmental regulation and oversight, are typically subject to different investor protection standards than U.S. issuers, and the economic instability of the non-U.S. countries. Fluctuations in currency of foreign countries may have an adverse effect to domestic currency values.

Narrowly focused investments typically exhibit higher volatility. The Fund's assets are expected to be concentrated in a sector, industry, market, or group of concentrations to the extent that the Underlying Index has such concentrations. The securities or futures in that concentration could react similarly to market developments. Thus, the Fund is subject to loss due to adverse occurrences that affect that concentration. KLXY is non-diversified.

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

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.

Risk Disclosures Continued:

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.