Weakness in KraneShares MSCI One Belt One Road ETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Neutral. The portfolio maintains a sizable cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The team managing the passive strategy earns a Low People Pillar. The strategy gets a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a substantial overweight position in quality exposure and has an overweight in volatility exposure compared with category peers. High quality exposure is attributed to stocks with low financial leverage and strong returns on equity. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. Even though the strategy's parent organization has some investor-friendly attributes like significant personal investments from managers, a relatively inexperienced portfolio management team holds it back. As a result, the firm obtains a Low Parent Pillar.

Analyst Rating

Elbit Systems

ICL-Israel Chemicals

Associated Capital Group

Aduro BioTech

KCAP Financial Inc 7 3/8 % Notes 2012-30.9.19 Sr

STERIS

KKR Income Opportunities Fund

iShares Floating Rate Bond ETF

Poly

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. KraneShares MSCI One Belt One Road ETF earns a Below Average Process Pillar rating. The process is bolstered by tracking an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. However, the rating is weakened by the fund's mediocre long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period. The parent firm's five-year retention rate of 54% also limits the process.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the price and yield performance of the MSCI Global China Infrastructure Exposure Index.  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 is designed to measure the equity market performance of listed companies with high revenue exposure to the Chinese government's "One Belt, One Road" initiative, and as determined by the provider of the underlying index. 

 The portfolio is overweight in financial services and basic materials relative to the category average by 20.2 and 13.1 percentage points, respectively. The sectors with low exposure compared to category peers are utilities and industrials, underweight the average by 26.7 and 5.1 percentage points of assets, respectively. The portfolio is composed of 146 holdings and is relatively top-heavy. Of the strategy's assets, 38.8% are concentrated within the top 10 holdings, as opposed to the typical peer's 28.7%. And finally, in terms of portfolio turnover, looking at year-over-year movements, 34% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Below Average

Process

Kraneshares’s team earns a Low People Pillar rating. The main determinant of the rating is the instability of talent across its parent firm. The firm's asset-weighted manager tenure of five years suggests it could do more to retain portfolio managers. The managers' failure to consistently outperform peers at the funds they run, as measured by their combined three-year manager excess returns, also detracts from the team. The parent firm's five-year success ratio of 50% further holds the rating back. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup.

People

Kraneshares has a ways to go to become an industry-standard steward, resulting in a Low Parent Pillar rating. Despite the negative rating, an area of strength of the firm is manager investment.  Over 29% of the firm's assets are covered by invested managers, in an effort to align portfolio manager and shareholder interests. Kraneshares's longest-tenured managers do not possess the same experience as management teams at other firms, a detractor from its rating. Specifically, average asset-weighted tenure within the firm is only five years.

Parent

KraneShares MSCI One Belt One Road Index ETF

OBOR tracks a market-cap-selected, tier-weighted index of companies likely to benefit from China's One Belt, One Road initiative.

iShares Environmental Infrastructure And Industrials ETF

SPDR S&P Global Infrastructure ETF

AGF Global Infrastructure ETF

iShares US Infrastructure ETF

iShares Global Infrastructure ETF

FlexShares STOXX Global Broad Infrastructure Index Fund

Global X U.S. Infrastructure Development ETF

SPDR S&P Kensho Intelligent Structures ETF

ProShares DJ Brookfield Global Infrastructure ETF

Global X Data Center REITs & Digital Infrastructure ETF

Why the infrastructure sector has shown resiliency even during times of market volatility. The case for alternative investments to help diversify your portfolio.

Infrastructure: Diversification Through Alternative Investments

iShares MSCI All Country Asia ex Japan ETF

VanEck Vectors Africa Index ETF

CSOP FTSE China A50 ETF

Xtrackers Harvest CSI 300 China A-Shares ETF

Xtrackers Harvest CSI 500 China A-Shares Small Cap ETF

Xtrackers MSCI China A Inclusion Equity ETF

Morgan Stanley China A Share Fund Inc

VanEck China Bond ETF

Central and Eastern Europe Fund

Direxion Daily CSI 300 China A Share Bear 1X Shares

Direxion Daily CSI 300 China A Share Bull 2X Shares

Global X China Biotech Innovation ETF

Global X China Energy ETF

Global X MSCI China Health Care ETF

Global X China Industrials

Global X MSCI China Information Technology ETF

Global X MSCI China Large Cap 50 ETF

Global X China Materials ETF

Global X China Consumer ETF

Global X MSCI China Real Estate ETF

Global X MSCI China Consumer Staples ETF

Global X MSCI China Utilities ETF

Global X China Financials ETF

China Fund

Xtrackers MSCI All China Equity ETF

VanEck Vectors ChinaAMC SME-ChiNext ETF

Morgan Stanley Exch Traded Nts 2008-31.3.20 Ser-F Linked to S&P Chinese Renminbi TR Ind

iShares MSCI China A ETF

Invesco China Technology ETF

Direxion Daily CSI China Internet Index Bull 2X Shares

WisdomTree China ex-State-Owned Enterprises Fund

WisdomTree Chinese Yuan Strategy Fund

iShares MSCI China Small-Cap ETF

iShares MSCI Hong Kong ETF

iShares MSCI Japan ETF

First Trust China AlphaDEX Fund

iShares China Large-Cap ETF

ProShares UltraShort FTSE China 50

SPDR S&P China ETF

iShares Latin America 40 ETF

KraneShares Bosera MSCI China A Share ETF

KraneShares CICC China Leaders 100 Index ETF

Kraneshares MSCI China Environment Index ETF

KraneShares MSCI All China Health Care Index ETF

KraneShares CSI China Internet ETF

iShares MSCI China ETF

Invesco Golden Dragon China ETF

Rayliant Quantamental China Equity ETF

SPDR S&P 500 ETF Trust

Templeton Dragon Fund

Vanguard FTSE Europe ETF

Vanguard Total World Stock ETF

ProShares Ultra FTSE China 50

Direxion Daily FTSE China Bear 3X Shares

Direxion Daily FTSE China Bull 3X Shares

ProShares Short FTSE China 50

SPDR Solactive Hong Kong ETF

Shares in China continue to post sharp year-to-date losses vs. an otherwise upside bias for global stocks, based on a set of exchange-traded funds tracking the world's major equity regions through yesterday's close (Aug. 25). Some investors see opportunity in beaten-down shares, but there's still a wide-ranging debate as the market prices in higher uncertainty driven by the vagaries of Beijing's evolving policy agenda.

China Is This Year's Downside Outlier For Global Stock Markets

Franklin FTSE China ETF

Widespread flooding, tough social distancing measures at ports, chip shortages and far tighter regulation in some industries - these are all big challenges facing the Chinese economy right now. New and traditional infrastructure projects could provide a lifeline.

We're Downgrading China's Growth And Currency As Challenges Mount

China's ambitious infrastructure plan can be packaged in ETF form with the KraneShares MSCI One Belt One Road Index ETF (OBOR). “China's Belt and Road Initiative (BRI), sometimes referred to as the New Silk Road, is one of the most ambitious infrastructure projects ever conceived,” a Council on Foreign Relations article explained.

The ‘New Silk Road'? Investing in China's Belt and Road Initiative

VictoryShares Emerging Market Volatility Wtd ETF

PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF

Global X MSCI Nigeria ETF

iShares MSCI UAE ETF

Emerging market stocks continued their year-end rally to start 2021 buoyed by a wider rollout of COVID-19 vaccines as well as Joe Biden's victory in the U.S. presidential election.

5 Emerging Market ETFs Surging to Start 2021

WisdomTree Emerging Markets High Dividend Fund

Pacer Emerging Markets Cash Cows 100 ETF

Schwab Fundamental Emerging Markets Large Co. Index ETF

Invesco RAFI Strategic Emerging Markets ETF

Global X MSCI SuperDividend Emerging Markets ETF

Emerging markets had a bloodbath in January. Inside the worst-performing emerging funds.

Worst-Performing EM ETFs of January

News for KraneShares MSCI One Belt One Road Index ETF ETF (OBOR)