Strategy. Under normal circumstances, the Fund will invest at least 80% of its net assets (plus borrowings for investment purposes) in instruments in its Underlying Index or in instruments that have economic characteristics similar to those in the Underlying Index. The Underlying Index includes securities issued (or depositary receipts sponsored) by 50 Chinese companies classified by Fuzzy Logix, Inc. (doing business as FastINDX) (Index Provider) under the Fuzzy Logic Classification System as being in one of the following industries (collectively, 5G and Semiconductor-Related Industries): Semiconductor Manufacturing, Semiconductor Equipment and Services, Manufacturing Equipment and Services, Internet and Data Services, Electronic Equipment Manufacturing, Electronic Components, Consumer Electronics, Computer Hardware and Storage, Communications Equipment, Commercial Electronics and Application Software. Companies in the Application Software … Show more… Under normal circumstances, the Fund will invest at least 80% of its net assets (plus borrowings for investment purposes) in instruments in its Underlying Index or in instruments that have economic characteristics similar to those in the Underlying Index. The Underlying Index includes securities issued (or depositary receipts sponsored) by 50 Chinese companies classified by Fuzzy Logix, Inc. (doing business as FastINDX) (Index Provider) under the Fuzzy Logic Classification System as being in one of the following industries (collectively, 5G and Semiconductor-Related Industries): Semiconductor Manufacturing, Semiconductor Equipment and Services, Manufacturing Equipment and Services, Internet and Data Services, Electronic Equipment Manufacturing, Electronic Components, Consumer Electronics, Computer Hardware and Storage, Communications Equipment, Commercial Electronics and Application Software. Companies in the Application Software industry are eligible only if they are market leaders in artificial intelligence (AI) based software, such as voice recognition and generative AI. The securities included in the Underlying Index include China A-Shares available for investment through the Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect Programs and all securities listed in Hong Kong or the United States with China as the country of domicile. Securities must have an average daily traded value of over $1 million. The top 50 securities by free-float market capitalization are included in the Underlying Index, subject to a 10% cap on each constituent. The Underlying Index is reconstituted quarterly. At each quarterly reconstitution, (a) a single constituent cannot exceed 10% of the Underlying Index and (b) if 45% of the Underlying Index consists of companies that are more than 5% of the Underlying Index, the individual weights of companies that are above 5% will be adjusted until 45% of the Underlying Index consists of companies that are less than 5%. During this process, the weighting of companies below 5% of the Underlying Index also will be adjusted. In addition, to minimize turnover in the Underlying Index, new companies will not be added to the Underlying Index until they are ranked 45 or higher and existing constituent of the Underlying Index will not be removed until they are ranked below 55. A newly listed initial public offering (IPO) may be added to the Underlying Index prior to the quarterly reconstitution if the three-day average market capitalization is greater than $10 billion after the IPO starts trading on an exchange. The following China-related securities may be included in the Underlying Index and/or represent investments of the Fund: ? China A-Shares, which are shares of companies incorporated in mainland China that are traded on the Chinese exchanges and denominated in domestic renminbi. China A-Shares are primarily purchased and sold in the domestic Chinese market. To the extent the Fund invests in China A-Shares, it expects to do so through the trading and clearing facilities of a participating exchange located outside of mainland China (Stock Connect Programs). A Qualified Foreign Investor (QFI) license may also be acquired to invest directly in China A-Shares. ? China B-Shares, which are shares of companies listed on the Shanghai or Shenzhen Stock Exchange but quoted and traded in foreign currencies (such as Hong Kong Dollars or U.S. Dollars), which were primarily created for trading by foreign investors. ? China H-Shares, which are shares of companies incorporated in mainland China and listed on the Hong Kong Stock Exchange (H-Shares), where they are traded in Hong Kong dollars and may be traded by foreign investors. ? China N-Shares, which are shares of companies with business operations in mainland China and listed on an American stock exchange, such as NYSE or NASDAQ (N-Shares). ? P-Chips, which are shares of private sector companies with a majority of their business operations in mainland China and controlling private Chinese shareholders, which are incorporated outside of mainland China and traded on the Hong Kong Stock Exchange in Hong Kong dollars. ? Red Chips, which are shares of companies with a majority of their business operations in mainland China and controlled by the central, provincial or municipal governments of the PRC, whose shares are traded on the Hong Kong Stock Exchange in Hong Kong dollars. The Fund may invest up to 20% of its assets in instruments that are not included in the Underlying Index, but that the Funds investment adviser, Krane Funds Advisors, LLC (Krane or Adviser), believes will help the Fund track the Underlying Index. These investments may include equity securities and depositary receipts of issuers whose securities are not constituents of the Underlying Index, derivative instruments (including swaps, futures, forwards, structured notes and options), other investment companies (including exchange traded funds or ETFs) and cash or cash equivalents (including money market funds). The other investment companies in which the Fund may invest may be advised, sponsored or otherwise serviced by Krane and/or its affiliates. In addition to the China-related securities, which are described above, the following China-related securities may be included in this 20% basket: ? S-Chips, which are shares of companies with business operations in mainland China and listed on the Singapore Exchange. S-Chip shares are issued by companies incorporated anywhere, but many are registered in Singapore, the British Virgin Islands, the Cayman Islands, or Bermuda. Although the Fund expects to replicate (or hold all constituents of) the Underlying Index, the Fund reserves the right to use representative sampling to track the Underlying Index. Representative sampling is a strategy that involves investing in a representative sample of securities that collectively have an investment profile similar to the Underlying Index. As of May 31, 2024, the Underlying Index included 50 securities of companies with a market capitalization range of approximately $1.6 billion to $62.8 billion and an average market capitalization of approximately $10.5 billion. The Underlying Index is reconstituted and rebalanced quarterly. The Fund is non-diversified. To the extent the Underlying Index is concentrated in a particular industry, the Fund is expected to be concentrated in that industry. As of May 31, 2024, issuers in the Information Technology sector (98.0%) represented a significant portion of the Underlying Index. The Fund may engage in securities lending. Show less