Under normal market conditions, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in Ocean Related Companies. The Sub-Adviser believes that investing in Ocean Related Companies offers the potential for above-average long-term growth, especially if environmental, social and corporate governance (“ESG”) factors continue to become more consequential to investors. Examples of Ocean Related Companies include water infrastructure and technology companies, waste operator and technology companies, aquaculture operators, commercial fishing operators, retailers linked to the seafood value chain, specialty chemical manufacturers, petrochemical producers, retailers linked to the plastic value chain, shipping and logistics companies, shipping transportation companies, recreational marine product companies, port operators, port equipment manufacturers, offshore energy and services companies, biofuel producers, renewable energy operators and original equipment manufacturers, tourism and leisure companies, companies involved in earth imaging, engineering, design and consulting, third-party testing, inspection and certification, and packaging companies.

The Fund will invest in three categories of Ocean Related Companies:

(1) Ocean Leaders: companies that the Sub-Adviser has determined currently pursue strong ocean sustainability practices;

(2) Ocean Solutions: companies whose products and services seek to address sustainable ocean impacts; and

(3) Ocean Improvers: companies whose activities are currently having a negative to neutral impact on oceans or ocean resources but who are taking, or have formally expressed to the Sub-Adviser they are considering taking, material steps towards enhancing sustainability initiatives and reducing the impact that their products or services have on oceans or ocean resources over time, in conjunction with the Sub-Adviser’s preliminary engagement objectives. The Fund anticipates that a majority of the Fund’s assets will be invested in Ocean Improvers.

When engaging with Ocean Related Companies, the Sub-Adviser seeks to identify a clear engagement objective which it believes can have a positive impact on shareholder value and ocean sustainability improvements over time, and seeks to constructively engage with the company to achieve that objective by utilizing any or all of the approaches outlined below:

Using proprietary, fundamental, bottom-up analysis of company-disclosed and third-party data, the Sub-Adviser will analyze each investment opportunity to identify Ocean Related Companies for investment by the Fund consistent with its principal investment strategies. Under normal circumstances, the Fund will invest in approximately 30 to 50 companies of any market capitalization, which may be domiciled in any country, including in emerging markets, and may operate in any industry or sector. Due to the Fund’s focus on Ocean Related Companies, the Fund expects to invest significantly in companies in the Industrials, Consumer Staples, Materials and Utilities sectors.

The Fund will exit a position if, in the opinion of the Sub-Adviser, a more attractive investment opportunity exists and/or if the Sub-Adviser believes the thesis that drove the investment is no longer present. A company’s reluctance to constructively engage with the Sub-Adviser on, or failure to make material progress on, ocean-related impacts identified as part of an engagement objective, may result in divestment.

In addition to equity securities, the Fund may invest in derivative instruments (including swaps, futures, forwards, structured notes and options) for investment purposes, which may include altering the Fund’s exposure to currencies, sectors and individual issuers. Because the Fund invests a portion of its assets in securities that are traded in currencies other than U.S. dollars, the Fund may buy and sell foreign currencies to facilitate transactions in portfolio securities and may seek to hedge against currency risks. The Fund also may invest in other investment companies (including 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 Funds Advisors, LLC (the “Adviser”) and/or its affiliates.

The Fund is non-diversified and may engage in securities lending.