KraneShares announced in a press release today the new caps as well as an extension of the buffer periods and new names for its defined outcome ETFs. The firm attributed the choice to extend the period covered and subsequent cap and name changes to ongoing momentum for China internet stocks.
The KraneShares 100% KWEB Defined Outcome January 2027 ETF (KPRO ) extended its coverage from 2026 to 2027. The outcome period for the fund is now January 27, 2025 to January 22, 2027. The fund’s cap over the outcome period now sits at 10.01%.
Meanwhile, the KraneShares 90% KWEB Defined Outcome January 2027 ETF (KBUF ) shares the same new outcome period. The fund now offers a cap of 40.01% over the outcome period.
Understanding Buffer Strategies
Defined outcome strategies seek downside protection in the form of a buffer, over the outcome period. They also capture the upside, but only to a predetermined cap over the outcome period. Both funds invest in the KraneShares CSI China Internet ETF (KWEB ). KPRO offers a 100% buffer against drawdowns over the outcome period. KBUF buffers 90% of the downside of KWEB over the outcome period.
“KWEB has exceeded performance expectations since KPRO and KBUF were launched in February 2024,” explained Jonathan Shelon, COO of KraneShares, in the press release. “We believe that resetting the downside protection and increasing the upside potential by extending the outcome period is a benefit to existing and new investors.”
Both funds invest in KWEB as well as Flex Options (FLexible EXchange Options) on KWEB. China internet companies traditionally maintain higher levels of volatility than their U.S. counterparts. That means KPRO and KBUF may offer higher caps on the upside than other strategies based on U.S. tech stocks.
KPRO carries an expense ratio of 0.98%, while KBUF maintains an expense ratio of 0.97%.
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