KraneShares launches Asian ‘Dividend Aristocrats’ ETF

Sep 20th, 2022 | By | Category: Equities

KraneShares has launched a new income-focused ETF in the US targeting Asia-based companies offering sustainable dividends.

Brendan Ahern, CIO at KraneShares

Brendan Ahern, CIO of KraneShares.

The KraneShares S&P Pan Asia Dividend Aristocrats ETF (KDIV US) has been listed on NYSE Arca with an expense ratio of 0.69%.

KDIV delivers access to S&P Dow Jones Indices’ widely popular ‘Dividend Aristocrats’ strategy which tracks companies that have consistently increased their dividend payments on an annual basis over a sustained period.

The investment thesis behind the strategy is that these companies provide a reliable source of sustainable income while also being likely to exhibit favourable fundamental characteristics including consistent operating earnings, steady cash flow growth, and corporate discipline in volatile, low-growth markets.

The S&P Dividend Aristocrats Index Series is tracked by billions of dollars in ETF assets globally; however, KDIV is the first US-listed ETF to apply the methodology to the Pan Asia region.

Brendan Ahern, CIO of KraneShares, said: “As markets remain volatile in 2022, we believe dividend growers could continue to outperform the broader market. Adding dividend growers to an investment portfolio may result in lower volatility, compounded growth on dividend reinvestment, and reduced drawdown in declining markets.”


The fund tracks the S&P Pan Asia Dividend Aristocrats Index which selects its constituents from a universe of developed and emerging market stocks listed in Asia that have market capitalizations above $1 billion and average daily trading volumes greater than $3m.

To avoid potential dividend traps – companies with high but unsustainable dividend yields that subsequently reduce or scrap their payments – any firm with an estimated dividend yield above 10% is removed from the selection pool.

The index consists of all companies that have increased their dividend payments every year for at least seven years.

Constituents are weighted by indicated dividend yield while capping any single stock at 5% and limiting the weight of individual countries and GICS sectors to 30% each.

As of the end of August, the index contained 98 constituents. Japan and China had each reached the applicable 30% country cap while Australia and Hong Kong were the next-largest country exposures at 17% each.

Real estate stocks dominated the index’s sector allocation, reaching the 30% cap, while utilities (15%), financials (14%), and health care (11%) also played significant roles.

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