Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets (plus borrowings for investment purposes) in the publicly-traded and privately-offered securities of “Artificial Intelligence (“AI”) and Technology” companies and other instruments that have economic characteristics similar to such securities. For purposes of this 80% policy, derivatives, such as options, futures and swap contracts, on the securities of AI and Technology companies will be counted at notional value.

With respect to publicly-traded securities, the Fund considers a company to be an “AI and Technology” company if it meets the following two criteria on the quarterly rebalance date of the Solactive Worldline Artificial General Intelligence Index (“Underlying Index”):

The Fund’s investment sub-adviser, Worldline Capital Pte. Ltd. (the “Sub-Adviser”), has developed a proprietary methodology for assigning companies an “AI Exposure Score.” The AI Exposure Score is designed to quantify the exposure of a company to AI. Zero implies minimal to no exposure of the company to AI. Five implies that a company is materially exposed to AI. In order to assign AI Exposure Scores to companies, the Sub-Adviser reviews such companies’ public business descriptions, public filings, press releases, and financial disclosures made by companies in the Eligible Universe (defined below) for information regarding the companies’ involvement in AI-related businesses or the incorporation of AI technologies in their key operations, offerings, and research and development activities. The Sub-Adviser then uses its discretion to assign each company in the Eligible Universe a proprietary AI Exposure Score.

Solactive AG (“Solactive” or “Index Calculator”), which is not affiliated with the Fund, the Sub-Adviser, or the Fund’s investment adviser, Krane Funds Advisors, LLC (“Krane” or “Adviser”), determines the Eligible Universe on each quarterly rebalance date by identifying companies that meet the following criteria:

The Sub-Adviser categorizes each of the companies in the Eligible Universe that has an AI Exposure Score greater than zero as an AI Applications, AI Hardware or AI Infrastructure company.

The Sub-Adviser then provides the list of companies in each category to Solactive along with each such company’s AI Exposure Score, and Solactive calculates the Underlying Index quarterly, on the first Wednesday of February, May, August and November, by multiplying each company’s AI Exposure Score by its free-float adjusted market capitalization to establish its weight in the Underlying Index, subject to the following limits:

Under normal circumstances, the Fund invests primarily in the constituents in the Underlying Index and, with respect to such investments, seeks to provide investment results that, before fees and expenses, track the performance of the Underlying Index. Although the Fund expects to replicate (or hold all components of) the Underlying Index, the Fund reserves the right to use representative sampling for the portion of the Fund that tracks the Underlying Index. “Representative sampling” is a strategy that involves investing in a representative sample of securities that collectively have an investment profile similar to the Underlying Index.

The Fund intends to invest approximately 10% of net assets, as measured at the time of investment, directly or indirectly in (including through investment companies and special purpose vehicles (collectively, “SPVs”) that provide exposure to) privately offered securities. Such privately offered securities will not be in the Underlying Index. In selecting securities of private companies, whether investing directly or through SPVs, the Adviser looks for companies that may be preparing for an initial public offering or are in earlier stages of development, but positioned to qualify for inclusion in the Underlying Index once their shares reach public markets.

The Fund may invest in publicly-traded equity securities and depositary receipts not in the Underlying Index, derivative instruments (including swaps and futures), spot currencies and currency forwards (including for hedging), other investment companies (including SPVs, exchange traded funds or “ETFs”) and cash or cash equivalents (including money market funds). Certain investment companies in which the Fund may invest may be advised, sponsored or otherwise serviced by Krane and/or its affiliates.

As of March 31, 2026, the Underlying Index included 55 securities of companies with a market capitalization range of approximately $5.0 billion to $5.2 trillion and an average market capitalization of approximately $657.8 billion. The Fund is non-diversified. To the extent the Underlying Index is concentrated in a particular industry, the Fund is expected to be concentrated in that industry. As of March 31, 2026, the Index was concentrated in the Technology sector, as defined by FactSet/RBICS.

The Fund may engage in securities lending.