An ETF Targeting Auto Industry Renaissance

MarketsETF Trends

This article was originally published on ETFTrends.com.

ETFs allow investors to access creative strategies and innovative ideas, such as the newly crafted focus on companies that are advancing the automobile industry into tomorrow.

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For example, Krane Funds recently added the KraneShares Electric Vehicles and Future Mobility ETF (NYSEArca: KARS),

"KARS provides exposure to the entire electric vehicle ecosystem, which we believe will be a new renaissance taken place across automakers, software companies as well as the miners that provide all the rare materials going into electric vehicles," Brendan Ahern, Chief Investment Officer for KraneShares, said at the Inside ETFs 2018 conference.

The new ETF may help investors capitalize on future mobility initiatives, notably those in China, with countries around the world rapidly urbanizing populations.

"KraneShares has bee focused on China, but we are seeing trends that is happening in China that applicable elsewhere," Ahern said.

The Electric Vehicles and Future Mobility ETF tries to reflect the performance of the Solactive Electric Vehicles and Future Mobility Index, which include companies that McKinsey & Company has classified as Future Mobility.

Underlying holdings are further broken down into four categories, including Autonomous Driving, Connectivity, Electrification, and Shared Mobility. These companies include those engaged in the electric vehicles production, autonomous driving, shared mobility, lithium and copper production, lithium-ion/lead acid batteries, hydrogen fuel cell manufacturing and electric infrastructure businesses.

The undelrying index ranks components by market capitalization and then, provided there are at least 30 constituents, weighted so that the largest ten companies are weighted equally, the next ten largest companies are weighted equally, and if there are enough components, the next ten largest companies are weighted equally. So the underlying index follows a type of equally weighted, laddered breakdown.

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