Since we wrapped up the year last week, it is important to recap changes for the KraneShares model to understand the different investment themes we encountered throughout the year. As a reminder, the KraneShares Tactical Emerging Markets Model (TR) (KRANETACTEM.TR) seeks to identify and provide exposure to major themes in emerging markets. The model tactically provides exposure to China when it is favored and shifts to emerging markets areas outside of China when it is unfavored.

At the start of 2025, the KraneShares Tactical model was fully allocated to Chinese equities, by providing exposure through various KraneShares China-focused ETFs. As the year progressed, and especially on the back-half of the year, China saw some weakness relative to other emerging markets areas. Because of this, the KraneShares MSCI Emerging Markets EX China Index ETF TR (KEMX), which provides exposure to emerging markets outside of China, began to gain exposure in the model as it improved relative to other funds in the model. Anytime KEMX ranks above a specific position in its respective matrix, it absorbs that specific allocation. Since KEMX ranks higher than 3 other positions, it accumulates all those weights giving the fund a total weight of ~66.67%. As we begin the new year, the model continues to overweight emerging markets areas outside of China. The model will remain flexible, tactically adjusting exposure to China as market conditions evolve and new opportunities emerge.

The table below is a review of important technical data on a select group of KraneShares ETFs. Significant changes within the past week are highlighted in Green if positive or Red if negative. This portfolio is designed to be used as a "radar" screen to bring your attention to potentially important technical changes that may require your attention and potential action. When evaluating the Fund Score, the strongest issues have scores of 4 or higher while those ETFs with scores below a 3 are no longer considered solid citizens.

The distribution curve places each ETF on a bell curve according to their respective degrees of overbought or oversold status using a 10-week distribution. ETFs that are statistically oversold will appear on the left-hand side of the bell curve, while those that have become statistically overbought will appear on the right-hand side of the bell curve. Perhaps the most useful attribute of this feature is that it displays the entire universe on the curve at one time to give us a general picture of whether the KraneShares ETF universe is generally overbought on a near-term basis, or generally oversold. Our best opportunities are to buy strong relative strength ETFs that have regressed back toward mean conditions based on market weakness, or have become oversold based upon extreme market weakness. Weekly Distribution is a short-term gauge that is most helpful in timing entry and exit points, while the longer-term information of trend and relative strength is a more controlling factor in the decision of whether to buy or sell.

Legend:

• UPPERCASE indicates that the RS chart is on a buy signal.
• lowercase indicates that the RS chart is in a sell signal.
• GREEN lettering indicates the ETFs trend chart is on a buy signal.
• RED lettering indicates the ETF is on a sell signal.
• Box Color indicates the Sector Status Rating. Green = Favored, Yellow = Average, and Red = Unfavored.

The KraneShares Dynamic China Rotation Model is designed to identify major themes in the Chinese marketplace through the use of the Point & Figure relative strength tools. For more information on the portfolio construction and back testing, see the model info file on the models page.  (Note: The KraneShares ETF Models will be updated Tuesday mornings by 9:30 am EST) 

Weekly Changes: 

* - Dates prior to 10/15/2019, which is when the KraneShares Dynamic China Rotation Model became available on the NDW Research Platform, are representative of when the position was added to the backtested model.