EM ETF | KEMX: Emerging Markets ex China Index ETF
by Kraneshares
Customizing China Exposure within Emerging Market Portfolios
An Overview of the KraneShares MSCI Emerging Markets ex China ETF (Ticker: KEMX)
KEMX
3/31/2026
KEMX
KraneShares MSCI Emerging Markets ex China ETF
Investment Strategy:
KEMX is benchmarked to the MSCI Emerging Markets ex China Index, which tracks large-cap and mid-cap companies within emerging market countries, excluding China. KEMX enables investors to build tailored Emerging Market (EM) portfolios when combined with exposure to China. KEMX can be paired with KraneShares' China-focused funds to establish strategic positions in China without duplicating exposures.
KEMX Features:
- Exposure to large-cap and mid-cap companies within emerging market countries, excluding China
- Benchmarked to MSCI, a global leader in international indexing
By pairing KEMX with other KraneShares China-focused funds, including the below, investors can make strategic allocations to China.
- Offshore China (Growth): The KraneShares CSI China Internet ETF (Ticker: KWEB)
- Onshore China (Growth & Value): The KraneShares Bosera MSCI China A 50 Connect Index ETF (Ticker: KBA)
The size of China's equity market is large enough to be considered its own asset class.
China has the world's second-largest economy and stock market.
2024 Full Market Capitalization (USD Billions)
| Equity Asset Class | USD Billions | % |
|---|---|---|
| Developed Market Equities | ||
| United States | 74,456 | 51.27 |
| Europe | 20,329 | 14.00 |
| Japan | 7,352 | 5.06 |
| Pacific ex-Japan | 3,364 | 2.32 |
| Other (Israel and Canada) | 4,245 | 2.92 |
| TOTAL DEVELOPED | 109,747 | 75.58 |
| Rest of the World | ||
| Emerging Markets ex-China | 18,244 | 12.56 |
| China** | 16,527 | 11.38 |
| Frontier | 693 | 0.48 |
| TOTAL EM and FM | 35,465 | 24.42 |
| TOTAL | 145,212 | 100.00 |
Top 5 Country Weights in the MSCI All Country World Index (GDP Weighted)
United States, China, Germany, Japan, United Kingdom
Opening efforts spanning the past 19 years have made China's equity market available to outside investors.
- In 2002, the Chinese government launched the Qualified Foreign Institutional Investor (QFII) Quota Program, which allowed institutional investors who could demonstrate a limited capacity to repatriate earnings to purchase stocks listed on Mainland exchanges.
- From 2014 to 2016 the Stock Connect program was launched, allowing foreign investors to purchase Mainland listed stocks through accounts in Hong Kong without obtaining approval from the Chinese government.
- On September 3, 2018, MSCI began including Mainland listed A-shares in their Global Standard Indexes.
- 98% of Chinese stocks are listed in Hong Kong, Shenzhen (Mainland), or Shanghai (Mainland) exchanges, while 2% are listed in New York using American Depositary Receipts (ADRs).
A-Shares (Onshore)
Shenzhen Stock Exchange, Shanghai Stock Exchange
Offshore
HKEX, Nasdaq, NYSE
The unique characteristics of China's equity market performance demonstrate its capacity to have a distinct portfolio impact and provide diversification benefits.
- Over the past 23 years, China was the best performer in 6 years and the worst performer in 7 years.
- By contrast, the U.S. was the best performer in 7 years and the worst in 5 years.
Ranked Annual Performance of Equity Asset Classes
| RANK | 2001 | 2002 | 2003 | ... | 2025 | 2025 Rank |
|---|---|---|---|---|---|---|
| 1st | -1.39 | -5.82 | 60.33 | ... | 46.86 | Frontier |
| 2nd | -9.88 | -6.42 | 53.31 | ... | 37.09 | Emerging Markets ex China |
| 3rd | -12.39 | -10.28 | 45.77 | ... | 36.34 | Europe |
| 4th | -19.90 | -14.65 | 38.54 | ... | 29.20 | China |
| 5th | -22.23 | -18.38 | 35.91 | ... | 24.95 | Japan |
| 6th | -29.40 | -23.09 | 28.41 | ... | 20.62 | Pacific ex-Japan |
| 7th | ... | 17.75 | United States |
Asset classes: China, Emerging Markets ex-China, Japan, Pacific ex-Japan, Europe, United States, Frontier
China's weight in the MSCI Emerging Markets Index is not proportionate to its market capitalization or GDP. It is also relatively stagnant and does not change according to risk factors or changing market conditions.
EM By GDP
- China: 44%
- EM ex China: 56%
EM Total Market Capitalization
- China: 48%
- EM ex China: 52%
MSCI Emerging Markets
- China: 23%
- EM ex China: 77%
China's historical pattern of returns exhibits low correlations to other regions.
- Average correlations between China's equity market and other major equity markets, including other emerging markets, have remained low over the past 15 years, maintaining correlation coefficients generally lower than 0.7.
- Correlations remain low in bull and bear market environments.
Return, Risk, & Correlation (3/31/2011 – 3/31/2026)
| Asset Class | Annualized Return | Annualized Volatility | China | United States | Europe | Japan | Pacific ex-Japan | EM ex-China |
|---|---|---|---|---|---|---|---|---|
| China | 3% | 22% | 1.00 | |||||
| United States | 13% | 14% | 0.41 | 1.00 | ||||
| Europe | 7% | 13% | 0.45 | 0.75 | 1.00 | |||
| Japan | 7% | 16% | 0.39 | 0.56 | 0.64 | 1.00 | ||
| Pacific ex-Japan | 6% | 18% | 0.61 | 0.70 | 0.71 | 0.56 | 1.00 | |
| Emerging Markets ex-China | 4% | 18% | 0.58 | 0.67 | 0.71 | 0.56 | 0.84 | 1.00 |
China and EM ex China have further distinguished themselves from one another from a performance perspective in recent years, suggesting that a rotation strategy between the two could be beneficial.
China & EM ex China Performance Since 2019
Growth of 10,000 units from 12/31/2019 to 2/28/2026.
- China (MSCI China All Shares Index): Peaked around 2021, then declined significantly, ending near starting levels.
- EM ex China (MSCI Emerging Markets ex China Index): Showed stronger and more consistent growth, significantly outperforming China in recent years.
Investors looking to dynamically adjust their China position could create a blended China/ EM ex China portfolio that responds to relative value and growth factors between China and EM ex China.
For example, one hypothetical approach could be that as Relative Earnings Growth¹ increases and Relative Valuation² decreases between All China and EM ex China, investors could tactically overweight/underweight exposure to China.
All China / EM ex China Index Relative Valuation and Earnings Growth
- Growth Premium (Relative Earnings Growth): Relative 3-5 year expected EPS growth between the MSCI China All Shares Index and the MSCI Emerging Markets ex China Index
- Valuation Premium (Relative Valuation): Relative forward 12-month price/earnings ratio (P/E) between the MSCI China All Shares Index and the MSCI Emerging Markets ex China Index
Periods indicated: Overweight China / Underweight China based on relative growth and valuation signals.
MSCI Emerging Markets ex China Index Characteristics
Country Breakdown
| Country | Approximate Weight |
|---|---|
| Taiwan | ~28% |
| South Korea | ~23% |
| India | ~18% |
| Brazil | ~7% |
| South Africa | ~4.5% |
| Mexico | ~4% |
| Malaysia | ~2.5% |
| Poland | ~2.5% |
| Indonesia | ~2% |
| UAE | ~2% |
| Others | ~9% |
KraneShares MSCI Emerging Markets ex China Index ETF
Investment Strategy:
KEMX is benchmarked to the MSCI Emerging Markets ex China Index, which tracks mid-cap and large-cap companies within emerging market countries, excluding China. KEMX enables investors to build tailored EM portfolios with adjusted exposure to China. KEMX can be paired with KraneShares China-focused core and thematic funds to make a strategic investment in China without duplicating exposures.
Fund Details Data as of 3/31/2026
| Detail | Value |
|---|---|
| Primary Exchange | NYSE Arca, Inc. |
| CUSIP | 500767769 |
| ISIN | US5007677694 |
| Total Annual Fund Operating Expense (Gross) | 0.59% |
| Total Annual Fund Operating Expense (Net)* | 0.24% |
| Inception Date | 04/11/2019 |
| Distribution Frequency | Annual |
| Underlying Index | MSCI Emerging Markets ex China Index |
| Net Assets | $100,739,457 |
| Number of Holdings | 296 |
*Fee waivers are contractual and in effect until August 1, 2026
Top 10 Holdings as of 3/31/2026
| Holding | % |
|---|---|
| TAIWAN SEMICONDUCTOR MANUFAC | 14.7 |
| SAMSUNG ELECTRONICS CO LTD | 6.45 |
| SK HYNIX INC | 3.84 |
| RELIANCE INDUSTRIES LIMITED | 1.23 |
| MEDIATEK INC | 1.2 |
| DELTA ELECTRONICS INC | 1.2 |
| ACCTON TECHNOLOGY CORP | 1.08 |
| ICICI BANK LTD | 1.03 |
| VALE SA | 1.02 |
| HDFC BANK LIMITED | 1.01 |
KEMX Performance History as of 3/31/2026:
| Cumulative % | Average Annualized % | ||||||
|---|---|---|---|---|---|---|---|
| 3 Mo | 6 Mo | Since Inception | 1 Yr | 3 Yr | 5 Yr | Since Inception | |
| Fund NAV | 3.86% | 15.99% | 92.68% | 43.97% | 18.94% | 8.26% | 9.86% |
| Closing Price | 9.36% | 21.08% | 101.43% | 50.31% | 20.33% | 9.19% | 10.56% |
| Underlying Index | 3.16% | 13.70% | 83.39% | 41.30% | 18.55% | 8.07% | 9.08% |
Conclusion
- Within emerging markets, KraneShares believes China is in a league of its own; an asset class unto itself distinguished by its market size and unique drivers of risk and return.
- We believe that incorporating a strategic China investment strategy that distinguishes China from the rest of EM may help to optimize EM performance.
- We believe KEMX is a great tool to enable a variety of custom completion strategies around China.
Custom China Allocation Strategies
China Core-Thematic
Thematic investments may generally complement the China core allocation.
China Tactical
By analyzing various characteristics across countries and within regions, each strategy can be implemented tactically to further refine return and risk.
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
Index Definitions:
MSCI ACWI GDP Weighted (USD Gross) Index: This index is based on the flagship MSCI ACWI Index, its parent index, and includes large and mid cap stocks across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. The index uses a different weighting scheme than its cap weighted parent index, however. The weight of each country in the index is derived from its economic size (using GDP data) rather than the size of its equity market. Over time, GDP data tends to have more stability than equity market prices.
MSCI China (USD Net) Index: The index captures large and mid-cap representation across offshore listings of Chinese companies in the form of H shares, B shares, Red chips, P chips, and foreign listings such as ADRs. With 447 constituents, the index covers about 85% of this China equity universe. Currently, the index also includes Large Cap A shares, represented at 2.5% of their free float adjusted market capitalization.
China's Equity (Stock) Market: For the purposes of this presentation, this refers to the superset of investments including the Mainland, Hong Kong, and overseas listed securities found in the MSCI China All Shares Index. Note that others may use a different definition and, as such, the data provided by other sources may not match ours as it may exclude shares listed in certain places.
Index Definitions
| Country, Region & Market | Index | Index Definition |
|---|---|---|
| Developed Markets | MSCI WORLD INDEX | MSCI World Index (Net USD): captures large and mid cap representation across 23 Developed Markets (DM) countries. With 1,644 constituents, covers approximately 85% of the free float-adjusted market capitalization in each country. Inception Date: Mar 31, 1986. |
| Emerging Markets | MSCI EMERGING MARKETS INDEX | MSCI Emerging Markets Index (Net USD): captures large and mid cap representation across 23 Emerging Markets (EM) countries. With 834 constituents, covers approximately 85% of the free float-adjusted market capitalization in each country. Inception Date: Jan 01, 2001. |
| China (All China) | MSCI CHINA ALL SHARES INDEX (MXCNANM Index) | MSCI China All Shares Index (Net USD): captures large and mid-cap representation across China A shares, B shares, H shares, Red chips, P chips and foreign listings (e.g. ADRs). Inception date: Jun 26, 2014. Also includes MSCI China A Onshore Index (Inception: May 10, 2005), MSCI China Index (Net USD) with 153 constituents (Inception: Jan 1, 2001), and Shanghai Composite Index (Inception: Jul 15, 1991). |
| United States | MSCI USA INDEX | MSCI USA Index (Net USD): measures the performance of the large and mid cap segments of the US market. With 622 constituents, covers approximately 85% of the free float-adjusted market capitalization in the US. Inception Date: Mar 31, 1986. |
| Europe | MSCI EUROPE INDEX | MSCI Europe Index (Gross USD): captures large and mid cap representation across 15 Developed Markets (DM) countries in Europe. With 443 constituents, covers approximately 85% of the free float-adjusted market capitalization across the European Developed Markets equity universe. Inception Date: Mar 31, 1986. |
| Japan | MSCI JAPAN INDEX | MSCI Japan Index (Net USD): measures the performance of the large and mid cap segments of the Japanese market. With 321 constituents, covers approximately 85% of the free float-adjusted market capitalization in Japan. Inception Date: Mar 31, 1986. |
| Pacific ex-Japan | MSCI PACIFIC EX JAPAN INDEX | MSCI Pacific ex Japan Index (Net USD): captures large and mid cap representation across 4 of 5 Developed Markets (DM) countries in the Pacific region (excluding Japan). With 148 constituents. Inception Date: Aug 31, 1987. |
| Emerging Markets Excluding China (EM ex China) | MSCI EMERGING MARKETS EX CHINA INDEX | MSCI Emerging Markets ex China Index (Net USD): captures large and mid cap representation across 23 of the 24 Emerging Markets (EM) countries excluding China. With 692 constituents, covers approximately 85% of the free float-adjusted market capitalization in each country. Inception date: Mar 09, 2017. |
| Frontier | MSCI FRONTIER MARKETS INDEX | MSCI Frontier Markets Index (Gross USD): captures large and mid cap representation across 29 Frontier Markets (FM) countries. The index includes 109 constituents, covering about 85% of the free float-adjusted market capitalization in each country. Inception Date: Dec 18, 2007. |
Index Definitions (continued)
| Index | Index Definition | |
|---|---|---|
| China Internet | CSI OVERSEAS CHINA INTERNET INDEX (H11137 Index) | CSI Overseas China Internet Index (Net USD): 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. Inception Date: Sep 20, 2011. |
| China A-Shares | MSCI CHINA A INCLUSION INDEX | MSCI China A Index (Net USD) (NU718708 Index) (renamed as the MSCI China A Onshore Index as of March 1, 2018): captures large and mid-cap representation across China securities listed on the Shanghai and Shenzhen exchanges. The index covers only those securities that are accessible through "Stock Connect". Inception Date: May 10, 2005. MSCI China A International Index (Net USD): captures large and mid-cap representation and includes the China A-share constituents of the MSCI China All Shares Index. Inception Date: Jun 26, 2014. MSCI China A Inclusion Index (Net USD): is designed to track the progressive partial inclusion of A shares in the MSCI Emerging Markets Index over time. Inception Date: Oct. 23, 2017. |
| Emerging Markets Consumer Technology | SOLACTIVE EMERGING MARKETS CONSUMER TECHNOLOGY INDEX | 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. Inception Date: August 23, 2017. |
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/kemx. 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.
The Funds may invest in derivatives, which are often more volatile than other investments and may magnify the Funds' gains or losses. Derivatives are also subject to liquidity and counterparty risk.
The ability of KBA and KWEB to achieve their respective investment objectives is dependent, in part, on the continuous availability of A Shares and the ability to obtain, if necessary, additional A Shares quota.
KBA and KWEB are subject to political, social or economic instability within China which may cause a decline in value. KEMX is subject to the political, social or economic instability associated with investing internationally which may cause a decline in value. Emerging markets involve heightened risk related to the same factors as well as increase volatility and lower trading volume.
Narrowly focused investments typically exhibit higher volatility. The Funds' 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. 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. 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.
