How KraneShares Uses Volatility to Generate Income

In KraneShares’ robust suite of ETFs is a unique strategy that uses volatility to generate income for investors.

It all starts with the firm’s flagship ETF, the KraneShares CSI China Internet ETF (KWEB). The fund is designed to capture the growth opportunity in China. The concentrated thematic China ETF has a 10-year track record — and it’s volatile.

So, when KraneShares started studying the covered call space, the firm decided to create something that was the counterpart to KWEB.

KraneShares COO Jonathan Shelon

“We’ve always had what I would describe the ultimate growth strategy for China. But one of the things that kept coming up was ‘well how do you monetize the volatility that is China?’” KraneShares COO Jonathan Shelon said during VettaFi’s Income Strategy Symposium on October 27.

If KWEB is the growth bookend, the firm wanted to offer an income bookend, he noted.