Today, Krane Funds Advisors, LLC (“KraneShares”), an asset
management firm known for its global exchange-traded funds (ETFs)
announced the launch of the KraneShares Hedgeye Hedged Equity Index
ETF (Ticker: KSPY) on the New York Stock Exchange (NYSE).
KraneShares has an exclusive license to the Hedgeye Hedged Equity
Index provided by Hedgeye Asset Management, LLC (“HAM”), a
subsidiary of Hedgeye Risk Management, LLC (“Hedgeye”), a leading
independent provider of real-time investment research and online
financial media headquartered in Stamford, CT.
KSPY tracks the Hedgeye Hedged Equity Index. The Index provides
exposure to the S&P 500 while seeking to reduce volatility and
to provide downside risk management. The Index utilizes a model
based on Hedgeye’s proprietary Risk Range™ Signals that analyze the
daily trading range of the S&P 500. The Index toggles between
three options strategies based on where the S&P 500 falls
within these ranges. These options strategies are intended to
provide downside risk management, option income, and potential
compensation for the loss of upside. Depending on market
conditions, the Index can change options strategies as frequently
as daily.
“With equities reaching record valuations, volatility is
becoming a significant concern for investors,” said Brendan Ahern,
KraneShares CIO. “The top 10 stocks in the S&P 500 currently
account for over 35% of the index's market value, which is higher
than the 27% share they had during the tech bubble in 2000.1 This
concentration could potentially increase risk by skewing
performance towards certain sectors or companies. We believe now
may be an opportune time for investors to consider a strategy that
aims to reduce volatility and provide a downside hedge like
KSPY.”
“Hedgeye’s proprietary Risk RangeTM Signals provide us with the
indicators we need to effectively manage S&P 500 volatility in
a systematic manner,” said John S. McNamara III, CIO at HAM.
“We believe Hedgeye’s Risk RangeTM Signals are a valuable tool
for determining S&P 500 levels in the immediate term,” said
Hedgeye CEO, Keith McCullough, regarding the Hedgeye Risk Range™
Signals. “Since Hedgeye began publishing daily trading ranges in
2015, we’ve grown a considerable subscriber base, with investors
utilizing these reliable trading ranges daily in their own
strategies.”
“We are thrilled to partner with Hedgeye, an innovative research
firm, to deliver a differentiated solution for investors seeking
equity exposure with enhanced risk management,” said Jonathan
Krane, KraneShares CEO. “Combining KraneShares' ETF expertise with
select partners like Hedgeye underscores our commitment to bringing
sophisticated options-based strategies to our investors.”
An option hedged equity ETF uses a strategy involving the buying
and selling of options in addition to investing in equities. Its
goal is to provide investors with lower-risk alternatives to
traditional index ETFs. KraneShares manages the options exposure on
behalf of investors, which can be more economical and
time-efficient than buying individual stock options.
For more information on the KraneShares Hedgeye Hedged Equity
Index ETF (Ticker: KSPY), please visit
https://www.kraneshares.com/kspy or consult your financial advisor.
For more information regarding Hedgeye research or Hedgeye Risk
Range™ Signals, please visit https://www.hedgeye.com/.
1 Data from Bloomberg as of 6/30/2024
About KraneShares
KraneShares is a specialist investment manager focused on China,
Climate, and Uncorrelated Assets. KraneShares seeks to provide
innovative, high-conviction, and first-to-market strategies based
on the firm and its partners' deep investing knowledge. KraneShares
identifies and delivers groundbreaking capital market opportunities
and believes investors should have cost-effective and transparent
tools for attaining exposure to various asset classes. The firm was
founded in 2013 and serves institutions and financial professionals
globally. The firm is a signatory of the United Nations-supported
Principles for Responsible Investment (UN PRI).
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:
https://www.kraneshares.com/kspy. 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.
KSPY may invest in derivatives, which are often more volatile
than other investments and may magnify KSPY’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. KSPY 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 KSPY 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.
Hedges may have imperfect matching between the derivative and the
underlying security; there is no assurance that hedging will be
effective. Hedging may reduce or eliminate losses or gains.
Hedgeye Risk Management, LLC’s ("HRM") ability to publish daily
Risk Range™ signals is heavily dependent on the manual activities
of a single individual, HRM’S CEO and founder (“Key Man”). In Key
Man’s absence, the Risk Range™ signals will be published by another
individual (“Secondary Calculator”). The formula utilized by the
Secondary Calculator is based on a formula that incorporates the
same factors as the formula used by the Key Man but this formula is
not identical to the formula utilized by the Key Man. If the Key
Man were to leave HRM or is unable to calculate the Risk Range™
signals, the Risk Range™ signals and the Underlying Index may not
function as designed and adversely impact KSPY.
KSPY is new and does not yet have a significant number of shares
outstanding. If KSPY does not grow in size, it will be at greater
risk than larger funds of wider bid-ask spreads for its shares,
trading at a greater premium or discount to NAV, liquidation and/or
a trading halt. Narrowly focused investments typically exhibit
higher volatility. KSPY’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, KSPY is subject to loss due to
adverse occurrences that affect that concentration.
Large capitalization companies may struggle to adapt fast,
impacting their growth compared to smaller firms, especially in
expansive times. This could result in lower stock returns than
investing in smaller and mid-sized companies. KSPY 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 Fund.
Index Provider Disclaimers
The Hedgeye® Hedged Equity Index (the “Index”) is a product of
HAM which has contracted with S&P Opco, LLC (a subsidiary of
S&P Dow Jones Indices LLC) (“SPDJI”) to license the S&P 500
Index in connection with the Index. The S&P 500 Index,
S&P®, S&P 500®, the 500, US 500 are the property of SPDJI
and/or its affiliates (“S&P Dow Jones Indices”) and/or their
third party licensors. S&P®, S&P 500®, the 500, US 500 are
registered trademarks of S&P Global Inc. and/or its affiliates,
Dow Jones® is a registered trademark of Dow Jones Trademark
Holdings LLC (“Dow Jones”); and these trademarks have been licensed
to S&P Dow Jones Indices and have been sublicensed for use for
certain purposes by HAM. S&P Dow Jones Indices and its third
party licensors shall have no liability for any errors or omissions
in the S&P 500 Index and the Index is not owned, endorsed, or
approved by or associated with S&P Dow Jones Indices.
The Fund is based on the Index and is not sponsored, endorsed,
sold or promoted by S&P Dow Jones Indices or its third party
licensors. Neither S&P Dow Jones Indices nor its third party
licensors make any representation or warranty, express or implied,
to the owners of the Fund or any member of the public regarding the
advisability of investing in securities generally or in the Fund
particularly or the ability of the Index and/or the S&P 500
Index to track general market performance. S&P Dow Jones
Indices’ only relationship to Hedgeye Asset Management, LLC with
respect to the Index is the licensing of the S&P 500 Index and
certain trademarks, service marks and trade names of S&P Dow
Jones Indices or its third party licensors. S&P Dow Jones
Indices and its third party licensors are not responsible for and
have not participated in the determination of the prices and amount
of the Fund or the timing of the issuance or sale of the Fund or in
the determination or calculation of the equation by which the Fund
may convert into cash or other redemption mechanics. S&P Dow
Jones Indices and its third party licensors have no obligation or
liability in connection with the administration, marketing or
trading of the Fund. There is no assurance that investment products
based on the Index will accurately track index performance or
provide positive investment returns. S&P Dow Jones Indices LLC
is not an investment adviser, commodity trading advisory, commodity
pool operator, broker dealer, fiduciary, “promoter” (as defined in
the Investment Company Act of 1940, as amended), “expert” as
enumerated within 15 U.S.C. § 77k(a) or tax advisor. Inclusion of a
security, commodity, crypto currency or other asset within an index
is not a recommendation by S&P Dow Jones Indices to buy, sell,
or hold such security, commodity, crypto currency or other asset,
nor is it considered to be investment advice or commodity trading
advice.
NONE OF S&P DOW JONES INDICES, ITS THIRD PARTY LICENSORS,
HEDGEYE OR KRANE GUARANTEES THE ADEQUACY, ACCURACY, TIMELINESS
AND/OR THE COMPLETENESS OF THE S&P 500 INDEX, THE INDEX OR ANY
DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT
LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC
COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES AND
ITS THIRD PARTY LICENSORS SHALL NOT BE SUBJECT TO ANY DAMAGES OR
LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW
JONES INDICES AND ITS THIRD PARTY LICENSORS MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO
RESULTS TO BE OBTAINED BY HEDGEYE, OWNERS OF THE HEDGEYE HEDGED
EQUITY ETF, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
S&P 500 INDEX, INDEX OR WITH RESPECT TO ANY DATA RELATED
THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT
WHATSOEVER SHALL S&P DOW JONES INDICES OR ITS THIRD PARTY
LICENSORS BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO,
LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF
THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER
IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. S&P DOW
JONES INDICES HAS NOT REVIEWED, PREPARED AND/OR CERTIFIED ANY
PORTION OF, NOR DOES S&P DOW JONES INDICES HAVE ANY CONTROL
OVER, THE LICENSEE PRODUCT REGISTRATION STATEMENT, PROSPECTUS OR
OTHER OFFERING MATERIALS. THERE ARE NO THIRD-PARTY BENEFICIARIES OF
ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES
AND HEDGEYE, OTHER THAN THE LICENSORS OF S&P DOW JONES
INDICES.”
Hedgeye Asset Management, LLC (“HAM”) is not affiliated with the
Trust, Krane, the Trust’s administrator, custodian, transfer agent
or Distributor, or any of their respective affiliates. Krane and
HAM have entered into an index provider agreement (the “Agreement”)
pursuant to which HAM has licensed the exclusive use of the Index
and certain related marks to Krane for a fee, and Krane is
permitted to sublicense such rights to the Fund and uses the marks
for the purpose of promoting and marketing the Fund. Under the
Agreement, HAM is compensated, in part, on the asset size of the
Fund and therefore benefits directly from investments in the Fund.
HAM is a subsidiary of HRM. HRM provides Hedgeye Risk Range™
signals to HAM under a licensing agreement. As such, HRM benefits
directly from investments in the Fund.
The Fund is not in any way advised, managed, sponsored,
endorsed, sold or promoted by HAM or HRM, and neither HAM nor HRM
make any claim, prediction, warranty or representation whatsoever,
expressly or impliedly, either as to (i) the results to be obtained
from the use of the Index, (ii) the performance or price of the
Index at any particular time on any particular day or otherwise, or
(iii) the merchantability, fitness or suitability of the Index for
the particular purpose to which it is being put in connection with
the Fund. Neither HAM nor HRM has provided, nor do they provide,
any financial or investment advice or recommendation in relation to
the Index to Krane or its affiliates, including the Fund. All
rights in the Index vest in HAM other than those licensed to Krane
under the Agreement.
Neither HAM nor HRM makes any warranty, express or implied, as
to results to be obtained by Krane or its affiliates, owners of
shares of the Fund or any other person or entity from the use of
the Index or any data included therein. Without limiting any of the
foregoing, in no event shall HAM or HRM have any liability for any
special, punitive, indirect or consequential damages (including
lost profits) resulting from the use of the Index or any data
included therein, even if notified of the possibility of such
damages.
HRM sells financial research to financial institutions and
investors, including the Hedgeye Risk Range™ signals which are a
critical input of the Index provided to the Fund by HRM subsidiary,
HAM. HRM publishes Hedgeye Risk Range™ signals direct to its
subscribers who will receive the Risk Range™ signals before the
Fund due to processing time between publication and receipt of the
Risk Range™ signals by the Fund.
Solactive AG (“Solactive”) is the calculation agent of the
Index. The financial instrument that is referencing the Index is
not sponsored, endorsed, promoted, sold or supported by Solactive
in any way and Solactive makes no express or implied
representation, guarantee or assurance with regard to: (a) the
advisability in investing in the financial instruments; (b) the
quality, accuracy and/or completeness of the Index; and/or (c) the
results obtained or to be obtained by any person or entity from the
use of the Index. Solactive does not guarantee the accuracy and/or
the completeness of the Index and shall not have any liability for
any errors or omissions with respect thereto.”
KraneShares Trus (NYSE:KSPY)
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KraneShares Trus (NYSE:KSPY)
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