The Emerging Market Consumer Internet & E-Commerce Opportunity

An Overview of the KraneShares Emerging Markets Consumer Technology ETF

(Ticker: KEMQ)

KEMQ | 3/31/2026

Investment Strategy:

KEMQ seeks to track the Solactive Emerging Markets Consumer Technology Index. The Index selects companies from 26 eligible countries within emerging markets (EM) whose primary business or businesses are internet retail, internet software/services, purchase, payment processing, or software for internet and E-Commerce transactions. Upon rebalance, constituent weights are capped at 3% and country weights are capped at 40%.

Emerging Markets Consumer Technology Highlights:

• Internet adoption is expanding within emerging markets while domestic consumption and retail sales are steadily increasing and frequently taking place online.
• In 2025, despite the slowest expansion since the pandemic, the global middle class will surpass 4 billion for the first time, becoming the majority. World Data Lab projects this dominance will continue, with another billion+ people joining the middle class within the next decade, reaching 5.7 billion consumer class individuals out of a world population of 8.7 billion.
• We believe the growth of internet adoption within emerging markets is a long-term secular theme that may continue to play out over the course of decades.

KEMQ features:

• Access to emerging market internet companies that provide similar services as Google, Facebook, PayPal, Amazon, etc.
• Exposure to companies that stand to benefit from increasing domestic consumption by emerging markets' growing middle class, irrespective of their country of incorporation.
• Exposure to emerging market companies facilitating mobile E-Commerce sales.

Transformational growth in emerging markets is driven by the "Three P's"

Population

The middle-class consumer in Emerging Markets will drive global demand.

Penetration

Internet adoption is the catalyst for rapid innovation and facilitates "leapfrogging".

Performance

Technology firms across the emerging markets are taking global leadership positions.

This is why we buy EM:

• Demographics
• Urban Middle Class
• Consumption
• Adoption of Technology & Telecommunications
• Healthcare

But this is what we get when we buy broad EM:

• Commodities
• "Old economy" companies
• Slow growth sectors

Broad Emerging Markets have been "out of favor" in the past decade ...

Performance of MSCI EM and S&P 500

(3/31/2016 to 3/31/2026)

Chart showing Growth of 10,000 units comparing MSCI EM Index vs S&P 500 from 3/31/2016 to 3/31/2026. The S&P 500 significantly outperformed the MSCI EM Index over this period.

Alternative exposures include MSCI EM, EM Minimum Volatility, and EM ESG, but they are skewed towards value-oriented sectors.

MSCI Emerging Markets Index

• Information Technology: 32%
• Consumer Discretionary: 10%
• Communication Services: 8%
• Consumer Staples: 4%
• Health Care: 3%
• Real Estate: 1%
• Financials: 21%
• Industrials: 7%
• Materials: 7%
• Energy: 4%
• Utilities: 2%

MSCI EM Minimum Volatility Index

• Information Technology: 26%
• Communication Services: 13%
• Consumer Staples: 8%
• Health Care: 7%
• Consumer Discretionary: 5%
• Real Estate: >1%
• Financials: 21%
• Utilities: 6%
• Industrials: 5%
• Energy: 4%
• Materials: 3%

MSCI EM Selection Index

• Information Technology: 29%
• Communication Services: 12%
• Consumer Discretionary: 12%
• Consumer Staples: 3%
• Health Care: 3%
• Real Estate: 1%
• Financials: 21%
• Industrials: 6%
• Materials: 6%
• Energy: 4%
• Utilities: 2%

EM consumer/technology has outperformed emerging markets over the past decade.

• In order to show the historical performance of the EM consumer/technology sectors within the MSCI EM Index, we combined the Index's information technology, consumer discretionary, and communication services sectors. We used the sectors' pre- and post-GICS reclassification weightings pictured in slide 11.
• We found that EM consumer/technology outperformed both broad emerging markets since December 2010.

EM Consumer Technology vs. MSCI EM Index and S&P 500

Chart showing Growth of 10,000 Units from 12/1/2010 to 3/1/2026. EM Consumer Technology significantly outperformed both the S&P 500 Index and MSCI Emerging Markets Index over this period. A GICS Reclassification event is marked on the chart.

KEMQ's Forward P/E is still lower than the US Internet sector

KEMQ Forward Price-to-Earnings Comparison

(12/31/2017 through 3/31/2026)

Chart showing Forward Price-to-Earnings Ratio (FY1 P/E) comparing US Internet vs KEMQ from 12/31/2017 through 3/31/2026. KEMQ's Forward P/E has consistently remained below the US Internet sector's Forward P/E throughout the period.

However, capturing the performance of the EM consumer/technology sector can be complicated.

• In the past, E-Commerce and internet platforms were classified by Global Industry Classification Standards (GICS) as information technology (IT) companies.
• However, as this sector evolved, it ended up grouping social media platforms, E-Commerce, gaming, and internet companies with chip-makers and hardware companies.
• In October 2018, GICS underwent a major reclassification to resolve this issue. Information technology was left with mostly hardware companies, while E-Commerce and internet platforms were split between two other sectors: consumer discretionary and communication services (formerly telecommunication services).
• For instance, Alibaba and Mercado Libre were shifted to the consumer discretionary sector, while internet platforms, such as Baidu and Naver, were classified as communication services companies.

Weight of Select Sectors within the MSCI Emerging Markets Index Before and After Reclassification

Before Reclassification:

• Information Technology: 28%
• Consumer Discretionary: 10%
• Communication Services: 5%

After Reclassification:

• Information Technology: 28%
• Consumer Discretionary: 12%
• Communication Services: 9%

Weight of Select Sectors within KEMQ Before and After Reclassification

Before Reclassification:

• Information Technology: 61%
• Consumer Discretionary: 30%
• Communication Services: 4%

After Reclassification:

• Information Technology: 19%
• Consumer Discretionary: 43%
• Communication Services: 29%

KEMQ offers greater exposure to growth-oriented sectors than the MSCI Emerging Markets Index.

KEMQ Sector Allocation

• Communication Services: 29%
• Consumer Discretionary: 43%
• Consumer Staples: 5%
• Information Technology: 19%
• Financials: 2%

MSCI Emerging Markets Index Sector Allocation

• Information Technology: 32%
• Consumer Discretionary: 10%
• Communication Services: 8%
• Consumer Staples: 4%
• Health Care: 3%
• Real Estate: 1%
• Financials: 21%
• Industrials: 7%
• Materials: 7%
• Energy: 4%
• Utilities: 2%

Value-Oriented Sectors (highlighted in red in the MSCI EM Index chart)

Our index filtering process also results in a very different country breakdown than traditional emerging markets.

Unlike the MSCI Emerging Markets Index, KEMQ's index may contain companies located in developed markets that nonetheless derive significant revenue from emerging markets.

KEMQ Country Breakdown

• China: 32%
• South Korea: 15%
• Taiwan: 12%
• Singapore: 6%
• India: 4%
• United States: 3%
• Uruguay: 3%
• Japan: 2%
• Brazil: 1%
• Other: 22%

Country Breakdown: KEMQ vs. MSCI Emerging Markets

Although Japan and Germany are not emerging market countries, the holdings headquartered in these countries derive significant revenue from emerging markets.

Others include Malaysia, United Arab Emirates, and Egypt.

A maximum weight of 40% per Country of Domicile is applicable. If the 40% cap is breached, the following steps will be taken: Stocks from the respective Country of Domicile which have the smallest Market Capitalization values are removed until country weight is below or equal to 40%. To reach 50 companies in the index once again, companies from the eligible universe (excluding respective Country of Domicile) are selected based on highest Market Capitalization.

In order to deliver a precise representation of the emerging markets consumer technology opportunity, we worked with Solactive to develop the Solactive Emerging Markets Consumer Technology Index.

Filtering Process for Index Constituent Selection

Country Eligibility*

26 eligible countries: Argentina, Brazil, Chile, Colombia, Mexico, Peru, Puerto Rico, Cyprus, Czech Republic, Egypt, Greece, Hungary, Poland, Qatar, Russia, South Africa, Turkey, United Arab Emirates, China, India, Indonesia, South Korea, Malaysia, The Philippines, Taiwan, Thailand

Stock Size & Trading Minimums

• Minimum 3-month average daily trading volume of $1 million USD
• Minimum Market Cap of 1 billion USD

Industry & Sub-sector Selection

Select companies from Internet Retail and Internet Software/Services sub-sector and micro-sectors involved in the purchase, payment processing, and software for internet and e-commerce transactions

Ensure Proper Diversification

To mitigate exposure to any one company, constituents are capped at 3% and country weights are capped at 40%.

KEMQ

KraneShares seeks to minimize tracking error and trading costs

The index may also include companies incorporated in countries outside of the eligible list that derive significant revenue from one or more of the countries in the eligible list.

Emerging market internet companies around the world

A world map showing the geographic distribution of emerging market internet companies held in KEMQ, including:

• Alibaba Group (China)
• Tencent (China)
• Baidu (China)
• NetEase Games (China)
• NAVER (South Korea)
• WPG Holdings (Taiwan)
• TM (Southeast Asia)
• NASPERS (South Africa)
• Mercado Libre (Latin America)
• Cielo (Brazil)
• Cyfrowy Polsat (Poland)

Emerging market exposure to the Semiconductor Industry

KEMQ Subsector Breakdown

• Broadline Retail: 26%
• Interactive Home Entertainment: 14%
• Semiconductors: 16%
• Interactive Media & Services: 15%
• Application Software: 2%
• Other: 27%

Key Semiconductor Insights

• NVIDIA has become a well-known player in the semiconductor industry recently. However, it is a fabless semiconductor company, meaning it designs chips instead of manufacturing them.
• NVIDIA has cultivated pivotal partnerships with Taiwan Semiconductor (TSMC) and SK Hynix, which are integral to bringing its innovative products to market.
• TSMC, as the world's largest foundry, manufactures NVIDIA's high-performance GPUs using its cutting-edge 5nm and 4nm process nodes.
• SK Hynix is the undisputed leader in high-bandwidth memory (HBM) chips, securing 62% global market share in this specialized memory crucial for GPU-accelerated AI computation that companies like NVIDIA rely on.

NVIDIA Valuation Versus KEMQ Semiconductor Holdings

Revenue Estimates Beyond 2025

Bar chart comparing revenue estimates (in USD) for 2025, 2026, and 2027 for:

• NVIDIA
• Taiwan Semiconductor Manufacturing Company
• SK Hynix

Revenue estimates show significant growth projected for all three companies from 2025 through 2027, with NVIDIA projected to reach approximately $365 billion by 2027, Taiwan Semiconductor Manufacturing Company approximately $195 billion, and SK Hynix approximately $210 billion.

NVIDIA Valuation Versus KEMQ Semiconductor Holdings

NVIDIA Compared to Taiwan Semiconductor Manufacturing Company and SK Hynix

Company	Forward P/E	Price to Sales	2025 Revenue ($ Billions)
NVIDIA	21.76	21.17	130
Taiwan Semiconductor Manufacturing Company	21.51	10.55	123
SK Hynix	5.23	4.64	68

NVIDIA Price-to-Sales Versus KEMQ Semiconductor Holdings

Company	Listing Location	Weight in KEMQ (%)	Price-to-Sales (P/S)
NVIDIA CORP	United States	--	21.17
TAIWAN SEMI	Taiwan	3.62	10.55
SK HYNIX	South Korea	3.15	4.64
UNITED MICRO	Taiwan	2.51	2.59
NANYA TECH	Taiwan	2.32	8.98
VISERA TECHNOLOGIES	Taiwan	0.79	10.13
VANGUARD INTERNATIONAL SEMI	Taiwan	0.84	3.49
WIN SEMI	Taiwan	1.05	4.66
POWERCHIP SEMI	Taiwan	0.69	3.55
HUA HONG SEMICONDUCTOR	China	0.69	6.67

We believe using KEMQ to augment or replace an existing exposure to broad EM may provide performance benefits.

• We have found that investors tend to fall into one of three camps: no EM exposure, some exposure, or significant exposure.
• We have mapped out how KEMQ (EM Growth) may fit into each of these three investors' portfolios.

Investor Types and Hypothetical Portfolios

Investor Type	Current Allocation	Hypothetical Portfolio
Hypothetical Investor 1: No EM Exposure	0%	100% Other
Hypothetical Investor 2: Some EM Exposure	3-5%	EM Growth 3-5%, Other 95-97%
Hypothetical Investor 3: Significant EM Exposure	20%	EM Growth 3-5%, Broad-Based EM 15-17%, Other 80-82%

KraneShares Emerging Markets Consumer Technology ETF

Investment Strategy

KEMQ seeks to track the Solactive Emerging Markets Consumer Technology Index. The Index selects companies from 26 eligible countries within emerging markets whose primary business or businesses are internet retail, internet software/services, purchase, payment processing, or software for internet and E-Commerce transactions.

Fund Details (Data as of 03/31/2026)

Detail	Value
Primary Exchange	NYSE Arca, Inc.
CUSIP	500767876
ISIN	US5007678767
Total Annual Fund Operating Expense (Gross)	0.80%
Total Annual Fund Operating Expense (Net)*	0.50%
Inception Date	10/11/2017
Distribution Frequency	Annual
Underlying Index	Solactive Emerging Markets Consumer Technology Index
Net Assets	$47,145,601
Number of Holdings	63

Top 10 Holdings as of 03/31/2026

Ticker	%
MEITUAN-CLASS B (3690)	3.96
JD.COM INC-CLASS A (9618)	3.94
PDD HOLDINGS INC (PDD)	3.69
TAIWAN SEMICONDUCTOR MANUFAC (2330)	3.62
SEA LTD-ADR (SE)	3.51
NETEASE INC (9999)	3.42
ALIBABA GROUP HOLDING LTD (9988)	3.36
TENCENT HOLDINGS LTD (700)	3.30
NASPERS LTD-N SHS (NPN)	3.28
SK HYNIX INC (000660)	3.13

KEMQ Performance History as of 03/31/2026

	3 Mo	6 Mo	Since Inception	1 Yr	3 Yr	5 Yr	Since Inception
Fund NAV	-11.47%	-12.63%	-2.58%	25.77%	15.13%	-6.11%	-0.31%
Closing Price	-8.15%	-9.60%	0.56%	28.16%	16.54%	-5.58%	0.07%
Underlying Index	-11.20%	-12.21%	4.86%	26.32%	15.36%	-5.51%	0.56%

KraneShares

Empowering investors with access to the world's most powerful growth themes through ETFs, private strategies, and innovative investment solutions.

Extensive ETF Product Suite Spanning High Growth Sectors

China, Emerging Markets & Regional

China Suite

• KWEB Internet & E-Commerce
• KBA / CHIN China A Shares
• KSTR STAR Market
• KURE Healthcare
• KGRN Clean Technology
• KTEC Hang Seng Tech
• KCAI China Onshore Alpha Index

Broader Emerging Markets

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

U.S. & Developed Markets

• KSPY Hedgeye Hedged Equity
• BUYO Man Buyout Beta Index
• KVLE Value Line® Dynamic Dividend Equity

Levered & High-Conviction Exposure

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

AI, Robotics & Emerging Technology

Future Tech

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

Income & Covered Call

Fixed Income

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

Covered Call & Options Income

• KLIP China Internet & Covered Call
• KIQQ Nasdaq Buffer & Option Income

Alternative Income

• KWIN Wahed Alternative Income

Alternatives

Carbon Credits

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

Managed Futures

• KMLM Mount Lucas Managed Futures

Outcome Based Equity

• KPRO 100% KWEB Defined Outcome
• KBUF 90% KWEB Defined Outcome

Strategy also available in UCITS / ETC

Key Takeaways

• Our China experience has allowed us to identify and deliver extraordinary opportunities across emerging markets
• The three P's may shape buying behavior for decades to come
  • Population: The middle-class consumer
  • Penetration: Rapid internet adoption
  • Performance: The growth of technology platforms
• Many of the themes and opportunities that we observe in China extend across the Emerging Markets and include the consumer, technology, healthcare, the environment, and electric vehicles

Index Definitions

The MSCI Emerging Markets Net USD Index: Captures large and mid cap representation across 23 Emerging Markets (EM) countries.

MSCI World Net USD Index: The MSCI World Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31, 1969. The index includes developed world markets and does not include emerging markets.

The Solactive Emerging Markets Consumer Technology Index: Selects companies from 26 eligible countries within emerging markets whose primary business or businesses are internet retail, internet software/services, purchase, payment processing, or software for internet and E-Commerce transact.

The S&P 500 Index: An American stock market index based on the market capitalization of the 500 largest companies having common stock listed on the NYSE or NASDAQ.

Dow Jones Internet Composite Index: Designed to measure the performance of the 40 largest and most actively traded stocks of U.S. companies in the internet industry. To be eligible, a company must derive at least 50% of cash flows from the internet.

WisdomTree Emerging Markets ex-State-Owned Enterprises Index: Measures the performance of emerging markets stocks that are not state-owned enterprises. State-owned enterprises are defined as government ownership of more than 20% of outstanding shares.

MSCI Emerging Markets (EM) Minimum Volatility (USD) Index: Aims to reflect the performance characteristics of a minimum variance strategy applied to large and mid cap equities across 26 Emerging Markets countries.

Morningstar Active EM Category (Morningstar Diversified Emerging Markets Universe): An index composed of funds identified by Morningstar as "Diversified emerging-markets portfolios." These portfolios invest at least 70% of total assets in equities and at least 50% of stock assets in emerging markets.

MSCI EM ESG Leaders Gross USD Index: A capitalization weighted index providing exposure to companies with high Environmental, Social, and Governance (ESG) performance relative to their sector peers across 26 Emerging Markets countries. Launched on June 6, 2013.

MSCI Emerging Markets Consumer Discretionary USD Net Index: Captures large and mid cap representation across 26 Emerging Markets countries, classified in the Consumer Discretionary sector per GICS. Launched on January 1, 2001.

MSCI Emerging Markets Information Technology USD Gross Index: Designed to capture the large to mid-cap segments across 26 Emerging Markets countries, classified in the Information Technology sector per GICS. Launched on September 15, 1999.

MSCI Emerging Markets Communication Services Gross USD Index: Designed to capture the large to mid-cap segments across 26 Emerging Markets countries, classified in the Communication Services sector per GICS. Launched on September 15, 1999.

Term Definitions

Emerging Markets Consumer/Technology: Prior to the GICS reclassification in October 2018, this is defined as 28% MSCI Emerging Markets Information Technology Index, 10% the MSCI Emerging Markets Consumer Discretionary Index, and 5% the MSCI Emerging Markets Communication Services Index. After the reclassification, this is defined as 15% the MSCI Emerging Markets Information Technology Index, 14% the MSCI Emerging Markets Consumer Discretionary Index, and 11% the MSCI Emerging Markets Communication Services Index.

Price-to-Earnings Ratio (P/E): A company's price per share divided by the company's current earnings per share. The ratio is widely used as a valuation metric.

Forward Price-to-Earnings Ratio (FY1 P/E): A company's price per share divided by the company's estimated earnings per share for the next fiscal year. The ratio is widely used as a forward-looking valuation metric.

Revenue Estimates: Revenue estimates are projections of the total sales or income a company is expected to generate over a specific future period, often based on historical data and market conditions.

Price-to-Sales Ratio: A financial metric that measures a company's market valuation by dividing its market capitalization or share price by its total sales or revenue, indicating how much investors are willing to pay for each dollar of sales.

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/kemq. 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.

A-Shares are issued by companies in mainland China and traded on local exchanges. They are available to domestic and certain foreign investors, including QFIs and those participating in Stock Connect Programs like Shanghai-Hong Kong and Shenzhen-Hong Kong. Foreign investments in A-Shares face various regulations and restrictions, including limits on asset repatriation. A-Shares may experience frequent trading halts and illiquidity, which can lead to volatility in the Fund's share price and increased trading halt risks.

The Fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund's gains or losses. Derivatives are also subject to liquidity and counterparty risk.

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.

ETF shares are bought and sold on an exchange at market price (not NAV) and are not individually redeemed from the Fund. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns.

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.