KraneShares announced today the first two entries into its new single-stock leveraged ETF suite, launched on Nasdaq. The KraneShares 2x Long PDD Daily ETF (KPDD) and the KraneShares 2X Long BABA Daily ETF (KBAB) offer leveraged exposure to two of China’s largest internet companies.
Both funds will seek to generate twice (200%) the daily percent change of their respective company. The funds track either the U.S.-listed stock or the American Depositary Receipts (ADRs) of Alibaba and PDD Holdings.
“China Internet continues to be an important global growth theme,” said James Maund, KraneShares head of Capital Markets. “Our Single-Stock Levered ETF Suite provides a convenient way for bullish investors to gain levered exposure to top companies, including the largest China internet stocks.”
Gaining Leveraged Exposure to Two Global E-Commerce Giants
Alibaba is the third biggest e-commerce retailer globally, with businesses that span a number of sectors and industries. These include artificial intelligence, media, cloud computing, e-commerce, and more. PDD is the parent company of Temu and the fourth-biggest e-commerce company globally. Temu overtook Amazon last year for most monthly active users.
China’s internet companies generally demonstrate greater average historical annual revenue growth than their U.S. peers. With favorable government policy support, China’s consumer-facing sectors have a number of potential tailwinds this year.
“KraneShares long ago established itself as a strong partner for U.S. advisors seeking exposure to China equities,” said Todd Rosenbluth, head of research at VettaFi. “It is great to see them expand their lineup to offered targeted exposure.”
Leveraged funds carry elevated risk for investors as they intensify gains and losses of the underlying asset. They’re designed to be held for one trading day, as they capture single day, leveraged performance. Holding for longer than a single day compounds every trading day’s return. This performance generally varies, often significantly, from 200% of the underlying stock’s performance over the same period. Compounded performance is also magnified during periods of elevated stock volatility.
Under the Hood of KBAB and KPDD
Both funds offer experienced, bullish investors a chance to gain targeted, leveraged exposure to PDD Holdings and Alibaba. By gaining leveraged exposure through KBAB or KPDD, investors can avoid the hassle of maintaining their own collateral, or borrowing directly.
The KraneShares 2X Long BABA Daily ETF (KBAB) seeks to generate twice the daily percentage change of Alibaba’s ADR, BABA, currently listed on NYSE. It does so by investing the majority of its assets in Alibaba’s stock, as well as swap agreements and options, to create exposure to 200% of Alibaba’s performance. Holdings of the underlying stock also rebalance daily to match rising or falling prices.
The KraneShares 2x Long PDD Daily ETF (KPDD) seeks to generate two times the daily percentage change of PDD Holdings’ ADR, PDD, currently listed on Nasdaq. As with KBAB, it does so by investing in the underlying security as well as swaps and options to create twice the performance of the underlying stock. KPDD rebalances holdings of the underlying stock daily.
Both funds may also invest in government securities, cash and their equivalents, short-term bond funds and ETFs, and corporate or non-government bonds. These generally serve as collateral for use in the swaps and options employed by the funds.
High turnover, volatility, and compounding over time may cause fund performance to diverge from the underlying’s performance for any period greater than one day. KPDD carries an expense ratio of 1.26% while KBAB offers a management fee of 0.99%, with fee waivers that end August 1, 2026.
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