Krane Funds Advisors and Mount Lucas Team Up to Provide a Price-based Managed Futures Index for ETF Investors

NEW YORK, Dec. 8, 2020 /PRNewswire/ -- Krane Funds Advisors, in partnership with Mount Lucas, recently launched the KFA Mount Lucas Index Strategy ETF (KMLM), a fund that tracks the KFA MLM Index —a modified version of the MLM Index, a widely regarded benchmark for managed futures investing created by Mount Lucas in 1988.

This new partnership will seek to capitalize on the investment expertise of both firms. Mount Lucas is a pioneer in managed futures investing and will be the fund's sub-advisor. Krane Funds, a leader in ETF investing and in providing investors with asset classes and market exposures that were previously only available to institutional investors will be the fund's advisor.

The KFA Mount Lucas Index Strategy ETF will invest in 22 futures contracts—11 commodity markets, six currencies and five global bond markets—by tracking the KFA MLM Index, which evaluates market trading signals on a daily basis.

"We routinely see that institutional portfolios are underexposed to managed futures and over-exposed to equity risk," said Timothy Rudderow, CEO & CIO of Mount Lucas. "This scenario is fine when volatility is low, but the investment world was reminded in 2020 why highly liquid and uncorrelated investments are important. There may be significant beta in managed futures, and we believe our Index is the best way to passively access that beta."

"We are pleased to launch the KMLM ETF in partnership with Mount Lucas, leveraging their 30-year history and strong track record in the managed futures space," said Jonathan Shelon, COO of Krane Funds Advisors. "The ETF seeks to deliver the Mount Lucas team's expertise and the potential benefits of managed futures to all investors through a cost-effective¹ and highly liquid ETF structure. Launching KMLM continues our mission in providing differentiated, high-conviction investment strategies to global investors."

For more information about KMLM, visit kfafunds.com/kmlm, or talk to your financial advisor.

About Krane Funds Advisors

Founded in 2012, Krane Funds Advisors, LLC, is the investment manager for KFA Funds and KraneShares ETFs. We believe that investors should have cost-effective and transparent tools for attaining exposure to a wide variety of asset classes.

The KFA Funds product suite delivers differentiated, high-conviction investment strategies to global investors. We are passionate about identifying groundbreaking capital market opportunities and developing them into investment vehicles that offer a source of non-traditional diversification to our clients.

Krane Funds Advisors, LLC is majority-owned by China International Capital Corporation (CICC).

About Mount Lucas

Since 1986, Mount Lucas, based in Newtown, Pennsylvania, has provided innovative and alternative investment strategies to institutional and high-net-worth investors that enhance and diversify traditional investments. Mount Lucas' investment professionals have extensive experience in the development and use of systematic investment strategies and has been a pioneer in offering investors unique solutions to complex problems across equity, fixed income, currency and commodity markets. The firm has approximately $1.3 billion in assets under management as of September 30, 2020.

1. Buying and selling shares of the KFA Funds may result in brokerage commissions.

Carefully consider the Fund's investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Funds' full &summary prospectus, which may be obtained here: KMLM. Read the prospectus carefully before investing. Please note this link also contains the fund's top ten holdings, performance, and other important information.

Risk Disclosures

Investing involves risk, including possible loss of principal. There can be no assurance that a Fund will achieve its stated objectives..

The Fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund's gains or losses. A derivative (i.e., futures/forward contracts, swaps, and options) is a contract that derives its value from the performance of an underlying asset. The primary risk of derivatives is that changes in the asset's market value and the derivative may not be proportionate, and some derivatives can have the potential for unlimited losses. Derivatives are also subject to liquidity and counterparty risk. The Fund is non-diversified.

KMLM is subject to liquidity risk, meaning that certain investments may become difficult to purchase or sell at a reasonable time and price. If a transaction for these securities is large, it may not be possible to initiate which may cause the Fund to suffer losses.

KMLM invest through a subsidiary and is indirectly exposed to the risks associated with the Subsidiary's investments. Since the Subsidiary is organized under the law of the Cayman Islands and is not registered with the SEC under the Investment Company Act of 1940, as such the Fund will not receive all of the protections offered to shareholders of registered investment companies.

The value of a commodity-linked derivative investment typically is based upon the price movements of a physical commodity and may be affected by changes in overall market movements, volatility of the Index, changes in interest rates, or factors affecting a particular industry or commodity.

KMLM, and the Fund's Subsidiary will be considered commodity pools upon commencement of operations, and each will be subject to regulation under the Commodity Exchange Act and CFTC rules. Commodity pools are subject to additional laws, regulations and enforcement policies, which may increase compliance costs and may affect the operations and performance of the Fund and the Subsidiary. Futures and other contracts may have to be liquidated at disadvantageous times or prices to prevent the Fund from exceeding any applicable position limits established by the CFTC. Additionally, the fund's investments are subject to liquidity risk, which exists when an investment is or becomes difficult to purchase or sell at a reasonable time and price.

Diversification does not eliminate the risk of experiencing investment loss.

ETF shares are not redeemable with the issuing fund other than in large Creation Unit aggregations. Instead, investors must buy or sell ETF Shares in the secondary market with the assistance of a stockbroker. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling. The NAV of the Fund's shares is calculated each day the national securities exchanges are open for trading as of the close of regular trading on the New York Stock Exchange ("NYSE"), normally 4:00 p.m. Eastern time (the "NAV Calculation Time"). Shares are bought and sold at market price (closing price) not NAV. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined)

The KMLM ETF is distributed by SEI Investments Distribution Company (SIDCO), 1 Freedom Valley Drive, Oaks, PA 19456, which is not affiliated with Krane Funds Advisors, LLC, the Investment Adviser for the Fund, or Mount Lucas Management, the sub-adviser for the Fund.

SOURCE Krane Funds Advisors, LLC

Related Links

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