Traditional healthcare exchange-traded funds primarily focus on large-cap U.S.-based companies. A new ETF shifts the healthcare investing paradigm by emphasizing healthcare opportunities in China, the world's second-largest economy.
KraneShares, the New York-based ETF sponsor known for its lineup of unique China and emerging markets funds, introduced Thursday the KraneShares MSCI All China Health Care Index ETF (NYSE:KURE).
The KraneShares MSCI All China Health Care Index ETF tracks the MSCI China All Shares Health Care Index. That benchmark includes A-Shares, B-Shares, H-Shares, P-Chips and Red Chips, giving the new ETF exposure to companies listed in mainland China (A-Shares), Hong Kong (H-Shares) and the U.S.
Another China Boom
When it comes to fast-growing sectors, investors often highlight China's booming consumer discretionary, Internet and technology groups. Those themes are accessible with and reflected in ETFS such as the KraneShares CSI China Internet ETF (NASDAQ: KWEB) and the KraneShares Emerging Markets Consumer Technology ETF (NYSE: KEMQ).
China's healthcare sector is booming, however, as well and posting growth rates well in excess of the same sector in large developed markets.
“China currently has the fastest growing major healthcare market in the world with a five-year compound annual growth rate of 17 percent, compared to just 4 percent in the United States, and -2 percent in Japan,” said KraneShares. “China is the second largest healthcare market globally with total healthcare expenditure reaching $594 billion in 2015. A number projected to reach $1.1 trillion by 2020.”
What's Inside KURE
KURE's holdings include generic pharmaceuticals makers, traditional Chinese medicine firms, hospital administration, biotechnology, medical equipment production and healthcare technology companies.
“There is still opportunity for considerable growth in China’s healthcare market with per capita health spending at just $420, compared to an average of over $5,800 for the world’s top eight healthcare markets in terms of per capita expenditure,” according to KraneShares.
KURE is the second ETF introduced by KraneShares this year. The issuer launched the KraneShares Electric Vehicles & Future Mobility ETF (NYSE:KARS) last month. KURE charges 0.79 percent per year, or $79 on a $10,000 investment.
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