In an effort to profit from the “One Belt One Road Initiative” unveiled by China’s leader in 2013, KraneShares has rolled out an ETF that invests in China’s infrastructure stocks. The KraneShares MSCI One Belt One Road Index ETF (OBOR) tracks the MSCI Global China Infrastructure Exposure Index.
The fund lists on the NYSE Arca and comes with an expense ratio of 0.79%.
The One Belt One Road plan seeks to develop overland and maritime infrastructure to support China’s trading network, particularly as it relates to Eurasian countries. OBOR’s underlying index is designed to capture companies most likely to benefit from the infrastructure initiative.
The index weights exposure to Chinese firms at 45%, with 55% devoted to other countries. Individual non-China country weights are capped at 10% of the index, and countries not expected to benefit from China’s infrastructure efforts are excluded from the index, according to the prospectus.
OBOR’s underlying index can include the full gamut of China-related securities, everything from A-shares to red chips. At the end of June, the index had 92 holdings ranging in size from $919 million to $57.9 billion, with industrials making up 41% of the index and other significant concentrations in utilities and materials, the prospectus said.
KraneShares has total assets under management of $1.2 billion in five ETFs, most of which focus on China’s markets. OBOR brings the total to six.
Contact Heather Bell at [email protected]