The Fund seeks to achieve its investment objective by investing primarily in the following two Underlying ETFs: KraneShares MSCI Emerging Markets ex China Index ETF (“KEMX”) and KraneShares MSCI All China Index ETF (“KALL”). Each Underlying ETF seeks to provide investment results that, before fees and expenses, correspond to the price and yield performance of its respective underlying index.

In order to achieve its investment objective, the Fund is actively managed and seeks to mitigate downside risk while attempting to outperform broad emerging markets by dynamically adjusting its allocations between the Underlying ETFs and cash and cash equivalents. Under normal circumstances, the Fund will invest at least 80% of its net assets (plus borrowings for investment purposes) in securities of issuers located in emerging markets, including other investments, such as investment companies, that provide investment exposure to such securities.

In allocating the Fund’s assets to the Underlying ETFs, a baseline allocation between China and other emerging markets is set based on the current weightings of the MSCI Emerging Markets Index (“Parent Index”), which includes China and the other emerging markets. On a quarterly basis, the Fund then adjusts the baseline allocation between China and other emerging markets up to 30% based on valuation measures, such as price to book ratio, price to equity ratio, price to earnings ratio, and dividend yield. The moving averages of the Parent Index are also considered. For example, if the baseline allocation of China as compared to other emerging markets in the Parent Index is 40% and 60%, respectively, the quarterly allocation to China will be between 10% and 70%. The allocation adjustments can occur more frequently than quarterly, such as during periods of extreme market volatility or when other triggers are met. In addition, the Fund can allocate up to 10% to cash and cash equivalents based on market conditions. The Underlying ETFs may invest in securities that are not included in the Parent Index.

Although issuers whose securities are included in an Underlying ETF’s index are domiciled, incorporated or have a principal place of business in, or are listed on an exchange of a particular market, issuers may be economically tied to other markets.

Each Underlying ETF may invest up to 20% of its assets in instruments that are not included in its respective underlying index, but that Krane Funds Advisors, LLC (“Adviser”) believes will help the Underlying ETF track its 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 an Underlying ETF may invest may be advised, sponsored or otherwise serviced by the Adviser and/or its affiliates.

Although each Underlying ETF reserves the right to replicate (or hold all constituents of) its respective underlying index, each Underlying ETF expects to use representative sampling to track its respective underlying index. “Representative sampling” is a strategy that involves investing in a representative sample of securities that collectively have an investment profile similar to an underlying index.

The Fund may engage in securities lending.