Market Overview

KraneShares Joins Forces With Dorsey Wright For ETF Rotation Model

KraneShares Joins Forces With Dorsey Wright For ETF Rotation Model

KraneShares, the exchange traded funds issuer behind a line of popular China ETFs, including the KraneShares CSI China Internet ETF (NYSE: KWEB), is joining forces with Dorsey Wright, the proprietor of relative strength-based indexes, for an ETF rotation model based on KraneShares funds.

“The model uses Nasdaq Dorsey Wright's industry-leading relative strength analysis to rebalance between KraneShares equity and fixed income ETFs on a weekly basis,” according to a statement issued by the firms.

KraneShares sponsors 13 China and emerging markets funds, but eight, including the aforementioned KWEB, will be part of the Dorsey Wright rotation model.

Why It's Important

The other ETFs that will be included in the model are as follows: the KraneShares Bosera MSCI China A ETF (NYSE: KBA), KraneShares MSCI All China Index ETF (NYSE: KALL), KraneShares MSCI All China Health Care Index ETF (NYSE: KURE), KraneShares CICC China Leaders 100 Index ETF (NYSE: KFYP), KraneShares E Fund China Commercial Paper ETF (NYSE: KCNY), KraneShares Emerging Markets Consumer Technology ETF (NYSE: KEMQ) and the KraneShares Emerging Market Healthcare Index ETF (NYS:KMED).

KWEB and KBA are KraneShares' two largest ETFs, combining for about $2.2 billion in assets under management.

“As China's importance within global asset allocation continues to expand, we have seen strong demand from our clients for risk-controlled China portfolios,” said KraneShares CEO Jonathan Krane.

What's Next

There's no word yet on whether the KraneShares/Dorsey Wright model will prove to be a precursor to an ETF, but Dorsey Wright models serve as the backstop for a slew of popular ETFs, including the First Trust Dorsey Wright Focus 5 ETF (NASDAQ: FV) and the Invesco DWA Tactical Sector Rotation Portfolio (NASDAQ: DWTR), among others.

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