KLIP China Web Lined Name Technique FAQ

KLIP China Web Lined Name Technique FAQ
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When can I count on to obtain my dividend?

We offer steering on distribution dates in an in depth dividend fee schedule posted right here on the KLIP webpage. Nonetheless, the time it takes between when the cash leaves our Fund and buyers obtain it of their brokerage accounts can range from dealer to dealer. Please attain out to your dealer for info on how they course of dividend funds for KLIP.

KraneShares pays dividends from the Fund on to the Depositary Belief & Clearing Company (DTCC), which then distributes the money to the brokers that personal shares in KLIP. We pay out dividends to DTCC on our said fee date. After that, the money can have left our Fund.

What’s a lined name technique?

A lined name technique is an funding technique that makes use of choices. An choice is a monetary by-product that provides consumers the suitable, however not the duty, to purchase (name) or promote (put) an underlying asset at an agreed-upon value (strike value) earlier than a predetermined date (expiration). A lined name technique refers back to the situation wherein one sells a name choice on a safety that she or he already owns, receiving the choice premium, which offers restricted draw back safety if the safety declines in value. If the safety value exceeds the strike value, the client can train the choice, paying the decrease strike value for the appreciated safety. If the safety value is beneath the strike value at expiration, the choice expires nugatory. The vendor of the choice retains the choice premium whatever the value of the safety at expiration.

What does KLIP do?

KLIP permits buyers to reap the benefits of volatility in China web shares by offering engaging month-to-month distributions which might be extremely correlated with the underlying ETF shares. Please click on right here to view an in depth distribution schedule for KLIP. KLIP writes (sells) name choices on the KraneShares CSI China Web ETF (Ticker: KWEB) whereas proudly owning KWEB shares. The choice premium acquired will present restricted draw back safety on the KWEB shares owned by the Fund if KWEB declines in value. KLIP’s distributions mirror the premium earned from promoting choices on KWEB, which tends to rise and fall with the volatility in KWEB shares.*

Will KLIP outperform or underperform KWEB?

KLIP exchanges the unsure upside potential of KWEB for premium revenue. In a declining value interval for KWEB, KLIP will present month-to-month revenue distributions that can offset a number of the value declines in KWEB. In an rising share value interval for KWEB, KLIP’s share value will stay comparatively secure and KLIP will proceed to distribute month-to-month revenue that’s aligned with the choices premium earned by the Fund. Throughout a interval of value appreciation for KWEB, KWEB’s share value might exceed the choice strike value, and the shares will likely be referred to as away. When this happens, any appreciation above the strike value is not going to be realized.

Does KLIP cap distributions?

In contrast to different lined name ETFs, KLIP doesn’t cap revenue distributions. The distributions buyers in KLIP obtain will likely be aligned with the choices revenue earned by the Fund for the month, minus bills, and costs, and any required capital features distributions, which normally happen at finish of the yr.

Is KLIP actively managed?

Though KLIP is assessed as an actively managed product, it’s managed systematically. With each creation unit, our portfolio administration staff sells an equal quantity of at-the-money, short-dated name choices on KWEB and purchases the corresponding KWEB shares.

*Via 10/31/2023, it’s estimated that 100% of the Fund’s distributions have been return of capital. Precise sources of the distributions might range on the finish of the yr, and will likely be supplied in a Type 1099-DIV.

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