The China Consumer E-Commerce Opportunity

An Overview of the KraneShares CSI China Internet ETF (Ticker: KWEB)

info@kraneshares.com

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).

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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

Concerned about volatility? Introducing The China Volatility Management Suite

We seek to provide investors with unique solutions to manage the volatility of their KWEB and/or China exposure

Option Income

KLIP

• KWEB Covered Calls
• Provides Monthly Distributions*

Growth

KWEB

• Long Only Exposure
• Top Internet Companies

Data from KraneShares.

*Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be higher or lower.

KWEB

KraneShares CSI China Internet ETF

Investment Strategy:

KWEB seeks to measure the performance of the investable universe of publicly traded China-based companies whose primary business or businesses are within the Internet and Internet-related sectors.

KWEB features:

• Access to Chinese internet companies that provide similar services as Google, Facebook, Twitter, eBay, Amazon, etc.
• Exposure to companies benefitting from increasing domestic consumption by China's growing middle class
• Exposure to Chinese internet companies listed in both the United States and Hong Kong

China Internet Sector Highlights:

• Chinese retail web sales totaled around $2.2 trillion¹ in 2024 (compared to $1.2 trillion² in the United States).
• China's internet population reached 1.11 billion people in 2024, a penetration of only 78%³. The U.S. internet population reached 316.2 million people, a penetration rate of about 93% in 2024.⁴
• Total Chinese retail sales reached $6.8 trillion in 2024.¹
• Online shopping accounted for 35% of retail purchases in China in 2024.¹

1. Data from National Bureau of Statistics of China as of 12/31/2024. Note: Figures converted from Chinese Renminbi to USD.
2. Data from United States Census Bureau as of 12/31/2024.
3. Data from Data Reportal as of 12/31/2024.
4. Data from Statista as of 12/31/2024.

As China's population moves into cities, they gain access to better jobs and wages, which in turn has a positive impact on Gross Domestic Product (GDP) per capita.

China Population Urbanization Rate & IMF China GDP Per Capita Current Prices

[Chart showing the correlation between China's urbanization rate (blue line) and GDP per capita (red line) from 1960 to 2024. The chart shows both metrics rising significantly, especially after 2000, with urbanization reaching about 65% and GDP per capita growing to approximately $14,000 by 2024.]

Data from Statista as of 12/31/2024. Please see end of presentation for definitions.

China's urban population has almost three times more disposable income than their rural counterparts.

China Household Per Capita Annual Disposable Income of Urban & Rural Households

[Chart showing the growing gap between urban and rural household disposable income in China from 1998 to 2024. The blue line represents urban household income, reaching approximately $7,300 by 2024, while the red line shows rural household income at about $2,900.]

Data from Bloomberg as of 12/31/2024. Please see end of presentation for definitions.

The China Internet Evolution

• China's E-Commerce market size surpassed the U.S. for the first time in 2013.⁴
• 78% of China's population has internet access compared to 93%² in the U.S.
• We believe there is potential for substantial continued growth in the Chinese internet sector.

China / US Internet Statistics

Statistic	China	US
Total internet population	1.11B¹	316mm²
% of population with internet access	78%¹	93%²
Country's share of world internet users	19.5%³	5.6%³
E-Commerce market size 2024	$2.2T⁴	$1.2T⁵
Total retail sales 2024	$6.8T⁴	$7.2T⁵
Online retail sales as % of total 2024	35%⁴	17%⁶

1. Data from Data Reportal as of 12/31/2024.
2. Data from Statista as of 12/31/2024.
3. Data from The World Bank, Data Reportal, and Statista as of 12/31/2024.
4. Data from National Bureau of Statistics of China as of 12/31/2024.
5. Data from United States Census Bureau as of 12/31/2024.
6. Data from Statista, United States Census Bureau as of 12/31/2024.

A Tale of Two Chinas

In 2013, the services sector surpassed the industrial sector as the largest contributor to China's GDP for the first time.

China GDP Breakdown (2010 - 2024)

[Chart showing the changing composition of China's GDP from 2010 to 2024, with three colored bars for each year representing:

• Blue bars: Service Industry (growing from ~45% to ~55%)
• Red bars: Industrial Industry (declining from ~45% to ~35%)
• Dark blue/black bars: Agricultural Industry (steady at ~7-8%)]

Data from Bloomberg, Statista, and National Bureau of Statistics of China as of 12/31/2024. Please see the end of the presentation for definitions.

Retail sales have expanded steadily in China over the past 10 years.

Value of Monthly China Retail Sales Index (11/30/2015 - 11/30/2025)

[Chart showing the growth trend of China's retail sales index from 2015 to 2025, with values in CNY billions increasing from around 2,500 to 4,500 over the period, with some seasonal fluctuations and a notable dip around 2020.]

• Total Chinese retail sales reached $6.8 trillion in 2024.
• Chinese retail websites sold $2.2 trillion worth of goods in 2024.
• Online shopping accounted for 27% of total retail sales in 2024.

Source: Data from Statista, National Bureau of Statistics of China as of 12/31/2024. Note: Figures converted from Chinese Renminbi to USD.

Data from Bloomberg as of 11/30/2025.

China Retail Sales Index: Retail sales (also referred to as retail trade) tracks the resale of new and used goods to the general public, for personal or household consumption. This concept is based on the value of goods sold.

China's rapid adoption of new technologies has produced a "leapfrogging" effect.

Payment

• Cash → Checking → Credit → Mobile Pay

Commerce

• Local Market → Big Box Retailer → E-Commerce

Transportation

• Taxi → Car Ownership → App-Based Ride Sharing

Healthcare

• Local Medical Care → Hospitals → E-Health

The Alibaba Ecosystem

Domestic E-Commerce

• Tmall.com (B2C Online Retail Platform)

International E-Commerce

• Lazada (Southeast Asia E-commerce)

Logistics

• Cainiao (E-commerce Logistics Platform)

Cloud & AI

• Alibaba Cloud (Cloud Computing Services & AI Initiatives)
• Tongyi Qwen (Large Language Model)

Media

• Youku (Online video platform)

Local Services

• Ele.me (Delivery Platform)

Financial Services

• Ant Group (China Financial Technology Platform)
• 33% Ownership

Fund holdings are subject to change. Please see page 25 for top 10 holdings.

The MSCI China Information Technology Index has outperformed large cap US and EM indexes.

Performance Comparison chart showing growth of 10,000 units from 2010 to 2025 for:

• MSCI China Information Technology Index (highest performance, reaching ~100,000 units)
• MSCI EM Information Technology Index
• S&P 500 Index
• MSCI Emerging Markets Index (lowest performance)

Data from Bloomberg as of 12/31/2025. Index returns are for illustrative purposes only. Index returns do not reflect fees or other costs associated with investing. Indexes are unmanaged, and one cannot invest directly in an index. Past performance is no guarantee of future results. See the end of the presentation for definitions.

The release of DeepSeek's hyper-efficient R-1 model indicated to global markets that China's internet giants are at the forefront of global AI development.

KWEB Performance

Chart showing growth of 10,000 units for KWEB from January 2025 to December 2025, with a notable spike after "DeepSeek releases R-1 model"

KWEB AI Examples

• Alibaba's Qwen is one of the most popular large language models (LLMs) in China.

• Baidu's ERNIE Bot is also a powerful tool, which we believe benefits from Baidu's data coming from traditional search.

• Tencent Hunyuan 3D Global supports high-quality generation and processing of 3D models.

• Kuaishou's K-ling AI allows content creators to generate complex and visually coherent videos.

Data from KraneShares and Bloomberg as of 12/31/2025. The performance data quoted represents past performance, and current returns may be higher or lower. Past performance does not guarantee future results. For additional fund performance and information, please see slide 25. Please see the end of the presentation for definitions.

China's firms continue to innovate in AI and robotics, with key differences from their US counterparts.

	China	US
Models	Prefer open-source, whole ecosystem approach	Prefer closed-loop, private models
Leaders	Mostly publicly-traded internet companies (KWEB names)	Mostly private companies and chipmakers
Robotics Supply Chain	Focus is on physical hardware, for export	Focus is on software (the brain)

A robot-operated coffee stand in Beijing

Analysis by KraneShares as of 12/31/2025.

We expect KWEB's already high share of revenue generated from AI and related services to increase as platforms connect model users to paid services.

KWEB 2025 Revenue

Pie chart showing Cloud Computing & AI Services at 6% of total revenue

• Alibaba, Tencent, Baidu, and Kuaishou are key providers of large language models (LLMs) globally.

• These companies mainly use LLMs, which are free, to drive use of their cloud computing services, which are paid.

• Kuaishou generates revenue from its premium AI video generation service, which is powered by its LLM.

• KWEB companies increased their total revenue attributable to cloud computing and AI services by 12% year-over-year (YoY) in the third quarter of 2025.

Data from KraneShares and Bloomberg as of 12/31/2025. Please see the end of the presentation for definitions.

The 3 & 5-year average revenue growth rates for China internet companies are like many U.S. internet companies.

Top 10 KWEB holdings vs. their U.S. equivalents as of the latest earnings release (Q3 2025).

Top 10 KWEB Holdings	Primary Business	KWEB Weight (%)	3 Year Average Revenue Growth Rate	5 Year Average Revenue Growth Rate	Comparable U.S. Business	3 Year Average Revenue Growth Rate	5 Year Average Revenue Growth Rate
Tencent	Social Media	10.23	9%	9%	Meta	13%	19%
Alibaba	E-Commerce	8.77	6%	12%	Amazon	11%	18%
PDD	E-Commerce	7.91	61%	72%	Amazon	11%	18%
Meituan	E-Commerce	7.50	23%	30%	Amazon	11%	18%
NetEase	Gaming	6.09	7%	12%	Activision Blizzard	2%	12%
Baidu	Search	4.36	2%	5%	Alphabet	11%	17%
Trip.com	Online Travel Services	4.24	47%	23%	Booking.com	36%	31%
JD.com	E-Commerce	3.97	8%	16%	Amazon	11%	18%
KE Holdings	Online Real Estate Services	3.89	12%	25%	Zillow	-16%	27%
JD Health	Online Health	3.87	26%	43%	Teladoc	8%	41%
Average:			20%	25%		10%	22%

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

Despite high growth rates, China's leading internet companies currently trade at relatively low multiples.

Top 10 KWEB Holdings	KWEB Weight (%)	Price to Earnings (P/E)	Forward P/E	Price to Book (P/B)	Price to Cash Flow (P/CF)
Tencent	10.23	23.2	19.4	4.24	21.10
Alibaba	8.77	19.5	23.5	2.27	13.26
PDD	7.91	11.1	10.5	2.87	10.47
Meituan	7.50	--	--	3.45	11.59
NetEase	6.09	17.6	16.0	3.93	17.75
Baidu	4.36	43.4	18.2	1.21	6.96
Trip.com	4.24	11.4	11.5	2.08	21.58
JD.com	3.97	9.7	10.9	1.33	5.98
KE Holdings	3.89	38.7	23.9	1.91	18.00
JD Health	3.87	34.4	32.6	2.80	42.34
Total Average	60.83%	23.22	18.50	2.61	16.90

Data from Bloomberg and FactSet as of 12/31/2025. Fund holdings are subject to change. Please see the end of the presentation for definitions. Forward P/E is based on future 12-months average analyst estimate.

KWEB's top 10 holdings are profitable, on average, and remain undervalued compared to their US counterparts.

KWEB Price vs. Top 10 Revenue & Net Income (Quarterly)

Chart showing quarterly data from 2019 to 2024:

• Purple bars: KWEB Top 10 Revenue (consistently high around $100-130 billion)
• Yellow bars: KWEB Top 10 Net Income (consistently positive)
• Blue line: KWEB Price ($) (showing significant volatility, peaking around 2021 and then declining)

Price to Earnings (P/E) Ratio

• 17.5x CSI Overseas China Internet Index
• 33.2x Dow Jones US Internet Composite Index

Data from Bloomberg as of 12/31/2025. Past performance does not guarantee future results. KWEB price used is NYSE closing price (USD) on the last trading day of each quarter, not NAV. Top 10 holdings updated semi-annually. Please see the end of the presentation for definitions.

KWEB's holdings have a combined $115 billion worth of cash on their balance sheets, more than Amazon and Alphabet combined.

Visual comparison of cash reserves:

• KWEB: $115 Billion (largest circle)
• Amazon: $79 Billion (medium circle)
• Alphabet: $23 Billion (smallest circle)

Data from Bloomberg as of 12/31/2025.

Historically, Alibaba has outperformed Amazon in terms of revenue growth and profit margins.

YoY Revenue Growth

Chart showing year-over-year revenue growth comparison between Alibaba and Amazon from 2014 to 2024, with Alibaba consistently showing higher growth rates in most years.

Profit Margins

Chart showing profit margin comparison between Alibaba and Amazon from 2014 to 2024, with Alibaba maintaining significantly higher profit margins throughout most of the period.

Data from Bloomberg as of 12/31/2024. Fund holdings are subject to change. Please see page 25 for top 10 holdings. Please see the end of the presentation for definitions.

One could purchase all the companies in KWEB with the market capitalization of either Amazon or Google and still have $750 billion+ left over

Visual comparison showing:

• Amazon = KWEB + $767 Billion
• Google/Alphabet = KWEB + $2 Trillion

Data from Bloomberg as of 12/31/2025. Please see the end of the presentation for definitions.

KWEB's top 10 holdings have strong buyback policies.

Bar chart showing Share Buyback Yield percentages for KWEB's top 10 holdings:

• JD.com: 10.65%
• JD Health: 9.97%
• KE Holdings: 9.96%
• Meituan: 9.05%
• Tencent: 8.95%
• Trip.com: 8.14%
• Baidu: 6.35%
• Alibaba: 6.04%
• NetEase: 4.20%
• PDD: 0%

Data from Bloomberg as of 12/31/2025. Fund holdings are subject to change. Please see the end of the presentation for definitions. Please see page 25 for top 10 holdings.

Adding a strategic China Internet allocation to EM portfolios can increase exposure to growth sectors.

• Broad-based EM indexes often have greater weights to sectors such as financials and commodities and less exposure to growth sectors.
• Investors may consider adding a strategic China Internet allocation to their current EM portfolio to achieve the sector exposure that matches their specific growth appetite.

Four pie charts showing different portfolio allocations:

MSCI EM 100%

• Information Technology: 28%
• Financials: 22%
• Consumer Discretionary: 12%
• Communication Services: 9%
• Materials: 7%
• Industrials: 7%
• Energy: 4%
• Consumer Staples: 4%
• Health Care: 3%
• Utilities: 2%
• Real Estate: 2%
• % Weight of Growth Sectors: 59.40%

CHINA INTERNET 25% MSCI EM 75%

• Information Technology: 21%
• Consumer Discretionary: 19%
• Financials: 17%
• Communication Services: 17%
• Materials: 5%
• Industrials: 7%
• Consumer Staples: 5%
• Energy: 3%
• Health Care: 3%
• Real Estate: 2%
• Utilities: 2%
• % Weight of Growth Sectors: 66.09%

CHINA INTERNET 50% MSCI EM 50%

• Consumer Discretionary: 26%
• Communication Services: 24%
• Information Technology: 14%
• Financials: 12%
• Materials: 4%
• Industrials: 7%
• Consumer Staples: 6%
• Energy: 2%
• Health Care: 2%
• Real Estate: 3%
• Utilities: 1%
• % Weight of Growth Sectors: 72.78%

CHINA INTERNET 75% MSCI EM 25%

• Consumer Discretionary: 32%
• Communication Services: 32%
• Financials: 7%
• Information Technology: 7%
• Industrials: 7%
• Consumer Staples: 6%
• Real Estate: 3%
• Materials: 2%
• Health Care: 1%
• Energy: 1%
• Utilities: 1%
• % Weight of Growth Sectors: 79.47%

China Internet – KraneShares CSI China Internet ETF (Ticker: KWEB) Growth Sectors – Information Technology, Consumer Discretionary, Industrials, Health Care, and Communication Services

Information is hypothetical, provided for illustrative purposes only, and not indicative of any particular investment. Data from Bloomberg as of 12/31/2025.

KraneShares CSI China Internet ETF

Investment Strategy:

KWEB (the Fund) tracks the CSI Overseas China Internet Index (the Index) and invests in China based companies whose primary business or businesses are focused on internet and internet-related technology. These companies are publicly traded on either the Hong Kong Stock Exchange, NASDAQ Stock Market, or New York Stock Exchange.

Fund Details Data as of 12/31/2025

• Primary Exchange: NYSE Arca, Inc.
• CUSIP: 500767306
• ISIN: US5007673065
• Total Annual Fund Operating Expense: 0.70%
• Inception Date: 07/31/2013
• Distribution Frequency: Annual
• Underlying Index: CSI Overseas China Internet Index
• Net Assets: $8,337,870,045
• Number of Holdings: 32

Top 10 Holdings as of 12/31/2025

Excluding cash. Holdings are subject to change.

Company	Ticker	%
TENCENT HOLDINGS LTD	700	10.23
ALIBABA GROUP HOLDING LTD	9988	8.77
PDD HOLDINGS INC	PDD	7.91
MEITUAN-CLASS B	3690	7.50
NETEASE INC	9999	6.09
BAIDU INC-CLASS A	9888	4.36
TRIP.COM GROUP LTD	9961	4.24
JD.COM INC-CLASS A	9618	3.97
KE HOLDINGS INC-CL A	2423	3.89
JD HEALTH INTERNATIONAL INC	6618	3.87

KWEB Performance History as of 12/31/2025:

Cumulative %

	3 Mo	6 Mo	Since Inception
Fund NAV	-2.76%	-14.10%	23.48%
Closing Price	-3.90%	-14.06%	23.47%
Underlying Index	-2.65%	-13.97%	23.29%

Average Annualized %

	1 Yr	5 Yr	10 Yr	Since Inception
Fund NAV	75.87%	23.48%	-11.90%	1.23%
Closing Price	74.73%	23.47%	-11.86%	1.15%
Underlying Index	77.29%	23.29%	-11.93%	1.28%

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 investors 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/kweb.

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.

Traditional China indexes have greater exposure to State-Owned Enterprises.

• State-Owned Enterprises are defined by MSCI as companies whose largest shareholder is a government entity or whose government ownership is over 20%.
• The MSCI China Index has higher exposure to SOEs, which constitute about 14% of the Index by weight.
• KWEB has no exposure to SOEs.

Two charts shown:

MSCI China Index Sector Breakdown of SOEs and Non-SOEs

Bar chart showing sector breakdown with SOE vs Non-SOE portions for each sector in the MSCI China Index

KWEB Sector Breakdown

Bar chart showing KWEB's sector allocation with major concentrations in:

• Consumer Discretionary (~40%)
• Communication Services (~40%)
• Consumer Staples (~7%)
• Real Estate (~4%)
• Industrials (~7%)
• Financials (~2%)

1. Data from MSCI and Bloomberg as of 12/31/2025. See end of presentation for index definitions.
2. Data from Bloomberg as of 12/31/2025.

Important Notes

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.

The MSCI Emerging Markets Net USD Index: captures large and mid cap representation across 23 Emerging Markets (EM) countries. With 834 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.

The CSI Overseas China Internet Index: The CSI Overseas China Internet Index selects overseas listed Chinese Internet companies as the index constituents; the index is weighted by free float market cap. The index can measure the overall performance of overseas listed Chinese Internet companies. The Index is within the scope of the IOSCO Assurance Report as at 30 September 2018. The index was launched on September 20, 2011.

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.

Forward Price-to-Earnings (P/E): Forward price-to-earnings (forward P/E) is a version of the ratio of price-to-earnings (P/E) that uses forecasted earnings for the P/E calculation. While the earnings used in this formula are just an estimate and not as reliable as current or historical earnings data, there is still benefit in estimated P/E analysis.

Price-to-Book (P/B): Companies use the price-to-book ratio (P/B ratio) to compare a firm's market capitalization to its book value. It's calculated by dividing the company's stock price per share by its book value per share. An asset's book value is equal to its carrying value on the balance sheet, and companies calculate it by netting the asset against its accumulated depreciation.

Price-to-Cash Flow (P/CF): The price-to-cash flow is a stock valuation indicator or multiple that measures the value of a stock's price relative to its operating cash flow per share.

Gross Domestic Product (GDP) is the total monetary value of all final goods and services produced within a country during a specific period, usually a year or a quarter.

Urbanization Rate: The urbanization rate is the speed at which a country's population is shifting from rural to urban areas, usually measured as the annual percentage change in the share of people living in urban areas.

GDP Per Capita: GDP per capita is the total value of all final goods and services produced in an economy in a given period divided by the population, giving an average economic output per person.

Household Per Capita Annual Disposable Income of Urban & Rural Households: This is the average amount of after-tax income available per person in a household over a year, measured separately for urban and rural households, that can be spent or saved.

Large language models (LLMs): Large language models are advanced AI systems trained on massive text datasets to understand and generate human-like language for tasks such as answering questions, summarizing, and translation.

(R-KS-SEI)

Important Notes (continued)

Revenue: Revenue is the total amount of money a company earns from its normal business activities, such as selling goods and services, before deducting any costs or expenses.

Average Revenue Growth Rate: The average revenue growth rate is the mean percentage increase (or decrease) in a company's revenue over a specified multi-period timeframe, typically calculated using year-over-year changes.

Net Income: Net income is the profit a company earns after subtracting all expenses, including operating costs, interest, and taxes, from its total revenue over a given period.

Dow Jones US Internet Composite Index: The Dow Jones US Internet Composite Index is a stock market index that tracks the performance of U.S.-listed companies whose primary business is internet-related services and technologies.

YoY Revenue Growth: Year-over-year (YoY) revenue growth is the percentage change in a company's revenue in the current period compared with the same period one year earlier.

Profit Margins: Profit margins are ratios that show what percentage of revenue a company keeps as profit after costs, such as gross, operating, or net profit margin.

Share Buyback Yield: Share buyback yield is the value of a company's share repurchases over a period expressed as a percentage of its market capitalization, indicating how much cash is being returned to shareholders through buybacks.

(R-KS-SEI)

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/kweb. 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.

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 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 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 may invest in Initial Public Offerings (IPOs). Securities issued in IPOs have no trading history, and information about the companies may be available for very limited periods. In addition, the prices of securities sold in IPOs may be highly volatile. In addition, as the Fund increases in size, the impact of IPOs on the Fund's performance will generally decrease. 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. In addition to the normal risks associated with investing, investments in smaller companies typically exhibit higher volatility. KWEB is non-diversified.

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.