Opportunities from China's Environmental Renaissance

Overview of the KraneShares MSCI China Clean Technology Index ETF (Ticker: KGRN)

Introduction to KraneShares

About KraneShares

Krane Funds Advisors, LLC is a specialist investment manager focused on China, Carbon, Climate, and other uncorrelated 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. In 2017, KraneShares formed a strategic partnership with China International Capital Corporation (CICC) when they acquired a majority ownership stake. 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

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

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

*Strategy also available in UCITS

Investment Strategy:

The KraneShares MSCI China Clean Technology Index ETF (KGRN) seeks to track the performance of the MSCI China IMI Environment 10/40 (USD Net) Index. The Index is comprised of securities that derive at least 50% of their revenues from environmentally beneficial products and services. The Index is based on four key Clean Technology environmental themes: Alternative Energy, Sustainable Water, Pollution Prevention and Energy Efficiency. The Index aims to serve as a benchmark for investors seeking exposure to Chinese companies that focus on contributing to a more environmentally sustainable economy by making efficient use of scarce natural resources or by mitigating the impact of environmental degradation. Constituent selection is based on data from MSCI Environmental, Social, and Governance (ESG).

China's Environmental Protection Highlights:

• The renewable energy sector has become a transformative force in China's economy, playing a crucial role in shaping its investment landscape and growth trajectory.
• In 2024, clean energy technologies contributed over 10% to China's economic growth for the first time, with sales and investments totaling 13.6 trillion yuan ($1.9 trillion).
• As part of its commitment to peak carbon emissions before 2030 and reach carbon neutrality by 2060, China will roll out a package of major climate initiatives. These include the development of offshore wind farms and the rapid construction of large-scale renewable energy bases in its desert regions, the National Development and Reform Commission announced.
• In 2021, China launched its national emission trading system (ETS)—now the largest carbon market in the world, which should help the country meet its emission reduction goals.
• Historically, China has a proven track record of achieving ambitious long-term renewable energy goals set forth within The Five-Year Plan.

KGRN Features:

• Access to China's fast-growing environmental protection industry that has rapidly become the largest renewable energy market in the world.
• Exposure to companies that stand to benefit from China's increased focus and spending on clean energy technologies.

China's equity market has become too big to ignore.

China has the world's second-largest economy and stock market.

Equity Asset Class 2024 Full MARKET CAPITALIZATION*

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

*Full market capitalization is based on MSCI Investable Market Indexes (IMI). Historic adjusted market capitalizations based on MSCI Standard Indexes. Adjusted market caps reflect free-float or shares that are freely traded in the open market. The free-float adjustment reduces the overall market by about 1/3.

**China includes Hong Kong, American depositary receipts (ADRs), and Mainland-listed Chinese companies. Market capitalization formula: MSCI China A International IMI + Hong Kong & ADR constituents within the MSCI Emerging Markets Index.

China's economic growth has come with a corresponding increase in automobile ownership, construction projects and energy consumption, particularly coal consumption.

Increase in Automobile Ownership

[Chart showing dramatic increase in automobile ownership in China from 2004 to 2024, with approximately 1600% growth]

Total Investment in Fixed Assets

[Chart showing significant increase in fixed asset investment in China from 2004 to 2024, with approximately 1100% growth]

Annual Increase in Energy Consumption

[Chart showing steady increase in energy consumption in China from 2004 to 2024, with approximately 250% growth by 2024]

This rapid development has impacted the environment.

Annual Exposure to PM 2.5 Air Pollution

[Bar chart showing PM 2.5 air pollution levels from 2013 to 2024 comparing China, United States, France (EU), and Recommended Level]

The chart shows China's PM 2.5 levels declining from approximately 58 µg/m³ in 2013 to around 29 µg/m³ in 2024, but still significantly higher than the United States, France (EU), and the recommended level of approximately 10 µg/m³.

China has a model for how to successfully address environmental concerns.

Many cities have encountered pollution during their development and have subsequently taken action to reduce it.

1952 Great Smog of London

• Due to the burning of coal during the early 1950's, smog was common in London. However, in December 1952, an anticyclone created an inversion – trapping the pollution and blanketing the capital for the next five days.
• May have killed as many as 12,000 people in London due to sickness.
• Four years later, the Clean Air Act banned the burning of polluting fuels and was considered an environmental turning point across the UK.

1966 New York City's "Killer Smog"

• A large mass of stagnant air trapped pollutants in NYC for three days in 1966.
• This was the third harmful smog incident in NYC within 15 years.
• The smog served as a catalyst for greater national awareness of air pollution, and the 1967 Air Quality Act and 1970 Clean Air Act were issued as a result.

Experts Believe China Is Not So Different:

Elizabeth M. Lynch, a legal scholar and founder of China Law and Policy, said that images of visible air pollution in Beijing from 2012, "aren't that much different from pictures of New York City in the 1950s and 1960s, or London during the same time."

As China's economy has shifted away from its dependency on manufacturing, it is now better equipped to deal with environmental concerns.

• China's economy has become more balanced in recent years as services surpassed industrials as the largest contributor to GDP.
• The US underwent a similar shift from the 1950's to the 1970's, and today the percent of US GDP generated from services far exceeds that of industrials.
• With a more balanced economy, China is now better equipped to tackle pollution issues generated from its industrial sector.

USA GDP Breakdown (1980-2024)

[Chart showing the shift in US GDP composition with services growing from about 55% to over 70%, industrial declining from about 30% to under 20%, and agricultural remaining small at under 5%]

China GDP Breakdown (2013-2024)

[Chart showing China's economic shift with services growing from about 45% to over 55%, industrial declining from about 45% to under 40%, and agricultural remaining stable at around 8%]

China's focus on environmental protection has strengthened following the formation of the Ministry of Environmental Protection in July 2008.

Timeline of China's Environmental Protection Initiatives:

• Oct 1974: China's first Environmental Protection team was officially established.
• Jul 1988: Environmental Protection team upgraded to the Environmental Protection Agency.
• Nov 1997: The first Energy Conservation Law was adopted by the People's Republic of China.
• Jul 2008: The Ministry of Environmental Protection was founded, setting environmental protection at the highest level of Chinese government.
• Mar 2014: "New Type Urbanization Plan" requires 50% of new construction to be green by 2020.
• Jan 2015: Renewable electric energy investment exceeds fossil fuel and nuclear for the first time.
• Feb 2015: Ministry of Science targets 5 million electric cars by 2020.
• Mar 2016: NPC ratifies China's 13th Five Year Plan with Environment as a critical focus.
• Apr 2016: China signs the 2016 Paris Agreement on climate change.
• Jan 2017: Central Government aims to spend $360 billion on renewable energy by 2020.
• Jan 2018: China's new Environmental Protection Tax Law is the first taxation system which promotes green development.
• Jan 2019: China's first law addressing soil pollution takes effect, creating a comprehensive legal framework for preventing and cleaning up soil pollution.
• Jan 2020: National Development and Reform Commission announced sweeping reform to phase out single use plastic by 2025.
• Jan 2021: China, home to the world's largest carbon market, launches the China National Emissions Trading Scheme (ETS).
• Jan 2022: The Shanghai Stock Exchange and Shenzhen Stock Exchange listing rules require companies in certain industries to publish CSR or ESG reports and disclose the standard/criteria used for the disclosure.
• Jun 2023: China extended tax breaks for new energy vehicle purchases through 2027, estimated to be worth $72 billion.
• May 2024: China's State Council has unveiled a 2024-2025 action plan to accelerate energy saving and carbon reduction efforts, targeting a 13.5% reduction in energy consumption per unit of GDP by 2025 compared to 2020 levels, in line with the 14th Five-Year Plan.
• Mar 2025: China completed the first issuance of domestic voluntary carbon credits (CCERs), with total issuance of 9.5 million tonnes CO₂e from initial projects, marking a breakthrough in the market-based carbon reduction mechanism.
• Oct 2025: Ministry of Ecology and Environment officially released the "2025 Annual Report on China's Climate Change Policies and Actions," summarizing new policy actions, expanded carbon market development, and progress in emissions mitigation.

Key Commitments:

• The goal of the Chinese government is to achieve 50% commercial green building certification by 2020. If met, China will represent half of the world's green building floor space.
• In signing the 2016 Paris Agreement, China promised to install 800 to 1,000 gigawatts of new renewable energy capacity by 2030, about the same energy capacity as the entire U.S. electricity system.
• President Xi Jinping announces China's goal to reach carbon neutrality by 2060 at the 2020 Climate Ambition Summit.
• The Chinese government is spending billions of dollars in subsidizing electric car manufacturers to stimulate growth and ensure that electric cars are affordable to average Chinese citizens.

China has been a global leader in electric vehicle adoption.

• China is the world's largest electric vehicle (EV) market with more than 8 million EVs sold in the first 11 months of 2023, which is nearly 8x more than that sold in the US.
• In 2023, China had 2.3 million publicly available EV charging stations compared to 0.2 million charging stations in the US.
• The Chinese government has extended its subsidy program for new energy vehicles, one of the most generous and comprehensive in the world, through 2027.

China Electric Vehicle Company Highlights

Nio is a Chinese automobile company that designs and manufactures premium EVs. Unlike other major EV manufacturers, Nio offers a battery-as-a-lease model which generates a significant long term revenue opportunity through monthly subscriptions. Additionally, NIO has a growing battery swapping and recharging station network, with a goal of having 4,000 stations in place by 2025.

BYD Co. Ltd. is among the top global electric vehicle producers, with a total of 30 industrial units stationed around the world. Recently, the company has been securing large e-bus orders from the United States and Europe, further expanding its global market share. Beyond electric car manufacturing, BYD is the world's leading producer of rechargeable batteries.

XPeng is a top EV maker within China, and quickly gained market share due to its affordable pricing on its electric SUVs and sedans. Unlike some of its competitors that outsource production to a third party, XPeng has established several manufacturing plants within China, which provides a pricing advantage and ability to increase its margins.

Li Auto exclusively sells the Li ONE SUV, a luxury sport hybrid SUV that has a small gasoline engine to generate additional electric power for the battery--popular among those with limited access to charging infrastructure. Beyond Li ONE, Li Auto plans to expand its product offerings through the development of new EV types to broaden its consumer base.

China has outpaced other regions in its expansion of electric power capacity from renewable technologies and may continue to do so.

China is projected to have the capacity to produce over 2,000 GW of electricity from renewable sources by 2027, representing a 14% increase from 2024.

However, China still lags the Americas and Europe in terms of renewable electricity per capita, meaning there remains significant room for growth.

China's Commitment To Emissions Reduction

• China likely hit peak carbon emissions in 2024 and could achieve carbon neutrality by 2060. This commitment was emphasized in China's 14th Five Year Plan, released in 2020.
• China will expand its ETS in two stages, improving processes and data quality by 2026, then reducing quota allocations from 2027.
• Clean technology companies in electric vehicles, batteries, solar power, and wind power will likely have a multi-year growth opportunity from this transition.

Energy Demand Trajectory For China Under Announced Pledges Scenario By Source

[Chart showing projected energy demand trajectory with Low Carbon sources increasing and Fossil Fuels decreasing over time]

China's energy mix may look dramatically different by 2060, its target for net zero emissions.

China is expected to completely phase out coal and dramatically scale up wind, solar, and nuclear energy.

China's Energy Mix

[Chart comparing China's energy mix in 2024 vs 2060 projection, showing coal being phased out and significant increases in wind, solar, and nuclear energy]

China has proven highly capable of achieving or even exceeding its ambitious targets for increasing renewable energy capacity.

• Under China's 14th Five-Year Plan, non-fossil fuel sources are expected to generate 39% of total electricity and make up 20% of total energy consumption by 2025. To ensure these targets are met, the National Energy Administration set the 2025 goal for non-fossil fuels to contribute 60% of total installed power generation capacity, driven by continued expansion in solar, wind, hydro, and nuclear energy.
• China is leading global renewable energy development with 339 GW of wind and solar projects, accounting for 64% of the global total. Experts believe this pace puts the global 2030 renewable capacity target within reach and recommend China increase its climate targets.

Case Study: 13th Five Year Plan (FYP) Targets vs. Results

[Table showing renewable energy capacity targets and actual results, demonstrating China exceeded targets for solar PV and wind power]

China's emissions likely peaked in 2024, and its leaders told the United Nations it will cut emissions by 7% to 10% by 2035. The new hydroelectric dam on the Yarlong Zangbo River is a key part of their plan.

• On July 19th, 2025, China broke ground on a new hydroelectric dam to rival the famed Three Gorges Dam.
• The new dam will generate more power annually than the entire United Kingdom.
• The dam is expected to reduce emissions by 2% annually.
• China's renewable energy suppliers and component makers are apt to benefit from the project, including:
  • China Yangtze Power, which could distribute power generated by the new dam
  • Longyuan Power, a leading provider of wind energy.
  • CATL, which may also benefit from increased demand for electrification.

Four Key Clean Technology Themes:

Category	Weight (%)	Definition	Examples
Energy Efficiency	59.07	Firms that address the global demand for energy and minimize effects on the environment.	NIO Inc.Xinyi Solar HoldingsLongi Green Energy TechnologyYadea Group HoldingsContemporary Amperex Technology
Alternative Energy	36.54	Firms supporting the development of renewable energy and alternative fuels.	Longyuan PowerChina Three Gorges RenewableChina Datang Corp RenewableConcord New Energy Group
Pollution Prevention	2.98	Firms focused on pollution prevention, waste minimization or recycling.	Conch VentureChina Everbright Environment GroupCanvest EnvironmentalZhejing Weiming Environmental
Sustainable Water	1.30	Firms that attempt to resolve water scarcity and water quality issues.	Beijing Enterprises Water Group Limited

Example Index Constituents from the Four Key Clean Technology Themes of KGRN:

Theme	Example Holding	Holding Weight (as of 12/31/2025)	Company Description
Energy Efficiency	NIO Inc.	3.98%	NIO Inc. manufactures and sells automobiles. The company offers electric vehicles and parts, as well as provides battery charging services. NIO serves customers worldwide.
Alternative Energy	China Longyuan Power Group Ltd	2.17%	Longyuan Power is China's largest wind power producer, generating an installed capacity of 22GW as of 2020 year-end, which represents 7.9% of total nationwide wind capacity. It has more than 300 wind farms spread across China and has expanded operations into Canada and South Africa.
Pollution Prevention	China Conch Venture	1.77%	Conch Venture is a large-scale enterprise group that provides a package solution for energy conservation and environmental protection. Its segment comprises solutions waste solutions; Waste-to-energy projects; port logistics services; New building materials; and Investments.
Sustainable Water	Beijing Enterprise Water	1.30%	Beijing Enterprises Water Group Limited develops water treatment systems. The Group specializes in water services and environmental protection businesses, with wastewater treatment as its core business segment.

KraneShares MSCI China Clean Technology Index ETF

Investment Strategy:

KGRN seeks to track the performance of the MSCI China IMI Environment 10/40 Index. The Index is comprised of securities that derive at least 50% of their revenues from environmentally beneficial products and services. The Index is based on five key Clean Technology environmental themes: Alternative Energy, Sustainable Water, Green Building, Pollution Prevention and Energy Efficiency.

*Formerly the KraneShares MSCI China Environment Index ETF

Fund Details Data as of 12/31/2025

Primary Exchange	NYSE Arca, Inc.
CUSIP	500767850
ISIN	US5007678502
Total Annual Fund Operating Expense	0.79%
Inception Date	10/12/2017
Distribution Frequency	Annual
Index Name	MSCI China IMI Environment 10/40 Index
Net Assets	$59,598,596
Number of Holdings	55

Top 10 Holdings as of 12/31/2025

Ticker	%
BYD CO LTD-H (1211)	8.64
LI AUTO INC-CLASS A (2015)	8.09
XPENG INC - CLASS A SHARES (9868)	7.51
CONTEMPORARY AMPEREX TECHN-A (300750)	6.99
GDS HOLDINGS LTD-CL A (9698)	4.98
CHINA YANGTZE POWER CO LTD-A (600900)	4.83
KINGDEE INTERNATIONAL SFTWR (268)	4.35
CGN POWER CO LTD-H (1816)	4.08
NIO INC-CLASS A (9866)	3.98
ZHEJIANG LEAPMOTOR TECHNOL-H (9863)	3.25

KGRN 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	-13.98%	5.12%	23.91%	19.93%	0.79%	-8.21%	2.64%
Closing Price	-14.44%	4.40%	23.53%	21.45%	0.79%	-8.37%	2.60%
Index	-13.78%	5.65%	18.22%	21.14%	2.05%	-8.44%	2.06%

Slide 10 List of Citations (retrieved 12/31/2025)

1. China's Ministry of Environmental Protection website, About MEP, History.
2. China's Ministry of Environmental Protection website, About MEP, History.
3. The National People's Congress of the PRC, Database of Laws and Regulations, "Law of the People's Republic of China on Energy Conservation."
4. China's Ministry of Environmental Protection website, About MEP, History.
5. "5 Laws To Watch Out For In 2018" China Water Risk, Feb. 14, 2018.
6. Library of Congress, "China: 2018 Constitutional Amendment Adopted", May 18, 2018.
7. International Energy Agency, Policies and Measures of China, Wind Power Technology Development 12th Five Year Special Planning. Oct. 31, 2013.
8. Ernst & Young, "China: Planning for an urban future".
9. REN21 Renewables Global Status Report 2016.
10. Tech in Asia, "China's government wants 5 million electric cars on the roads by 2020." Feb. 19, 2015.
11. Central Committee of the Communist Party of China, "The 13th Five Year Plan for Economic and Social Development of the People's Republic of China, 2016-2020".
12. United Nations Framework Convention on Climate Change, Paris Agreement – Status of Ratification. Nov. 4, 2016.
13. New York Times, "China Aims to Spend at Least $360 Billion on Renewable Energy by 2020." Jan. 5, 2017.
14. Supchina, "Electric vehicles now 1.2 percent of car market in China." May 26, 2017.
15. Global Compliance News, "China's new Law on the Prevention and Control of Soil Pollution imposes new obligations on enterprises and landowners", October 16, 2018.
16. Bloomberg News, "Chinese Food Giant Raises $2.1 Billion in Country's First Sustainability Loan." July 16, 2019.
17. SCMP, "China unveils sweeping plan to reduce single-use plastic by 2025", Jan. 20, 2020.
18. Xinhua, "Remarks by Chinese President Xi Jinping at Climate Ambition Summit", Dec. 12, 2020.
19. Environmental Defense Fund, "China's National ETS Open for Business", Jan. 5, 2021.
20. ESG Investor, "China's ESG Policy Dash," March 29, 2023.
21. Reuters, "China unveils $72 billion tax break for EVs, other green cars to spur demand," Jun 21, 2023
22. Climate Cooperation China, "China Issues Action Plan for Energy Saving and Carbon Reduction (2024-2025)," July 5, 2024
23. Progress Report of China's National Carbon Market (2025), Oct 4, 2025
24. China's PoliciesandActionsforAddressingClimateChange2025Annual Report, Oct 2025

Slide 11 List of Citations (Retrieved 12/31/2025)

1. Data from International Energy Agency (IEA), Last updated 1 Feb 2022.
2. He, Laura. "China's BYD is selling mor electric cars than Tesla," CNN Business. January 2, 2024. US Source: Kelley Blue Book Estimate as of 12/31/2023.
3. Data from China Electric Vehicle Charging Infrastructure Promotion Program (EVCIPA) as of 8/31/2023.
4. Data from Statista as of 3/31/2024.
5. "Policy Update: China announced 2020-2022 subsidies for new energy vehicles," International Council on Clean Transportation (ICCT). July, 2020.
6. Data from Statista, Evvolumes.com, CLSA, Macquarie, IEA as of 6/30/2022.
7. Nio, "A Brief History of Battery Swapping", June 20, 2020; Reuters, "EV maker Nio to have 4,000 battery swapping stations globally in 2025", July 9, 2021.
8. Technode, "BYD electric bus deal one of the biggest for US", Feb. 20, 2020.
9. Li Auto, Investors Overview, https://ir.lixiang.com/
10. XiaoPeng, "About Xpeng Motors", https://en.xiaopeng.com/about.html

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/kgrn. 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 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 ability of the Fund to achieve its 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. If the Fund is unable to obtain sufficient exposure to limited availability of A Share quota, the Fund could seek exposure to the component securities of the Underlying Index by investment in other types of securities. The Fund is subject to political, social or economic instability within China which may cause decline in value. Emerging markets involve heightened risk related to the same factors as well as increase volatility and lower trading volume. Fluctuations in currency of foreign countries may have an adverse effect to domestic currency values. The Fund may underperform other similar funds that do not consider conscious company/ESG guidelines when making investment decisions. 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.

Risk Disclosures Continued:

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. KGRN 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.

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