Table of Contents

The Funds file their complete schedules of Fund holdings with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. The Funds’ Form N-PORT reports are available on the Commission’s website at http://www.sec.gov.

A description of the policies and procedures that KraneShares Trust uses to determine how to vote proxies relating to Fund securities, as well as information relating to how the Funds voted proxies relating to Fund securities during the most recent 12-month year ended June 30, are available (i) without charge, upon request, by calling 855-857-2638; and (ii) on the Commission’s website at http://www.sec.gov.

Fund shares may only be purchased or redeemed from a Fund in Creation Unit aggregations. Investors who cannot transact in Creation Units of a Fund’s shares must buy or sell Fund shares in the secondary market at their market price, which may be at a premium or discount to a Fund’s net asset value, with the assistance of a broker. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying Fund shares and receive less than net asset value when selling Fund shares.

Shareholder Letter (Unaudited)

Dear Shareholders:

We are pleased to send you the Annual Report for the KraneShares Trust exchange-traded funds (ETFs) for the 12-month period ended March 31, 2023 (the Period). For the Period, the ETFs delivered the following returns:

Shareholder Letter (Unaudited) (continued)

Morningstar Peer Group Information

Shareholder Letter (Unaudited) (continued)

We are encouraged by recent developments in China’s capital markets. The challenging macroeconomic environment and resulting volatility in global equity markets that ensued over the past year led many U.S. and global investors to seek diversified sources of return, including China equities.

Shareholder Letter (Unaudited) (concluded)

Thank you for investing with us.

Jonathan Krane, CEO

March 31, 2023

Management Discussion of Fund Performance (Unaudited)

KraneShares CICC China Leaders 100 Index ETF

The KraneShares CICC China Leaders 100 Index ETF (the Fund) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the CSI CICC Select 100 Index (the Underlying Index).

The Underlying Index takes a smart-beta approach to systematically investing in companies listed in Mainland China. This quantitative approach reflects CICC’s top down and bottom-up research process, seeking to deliver the 100 leading companies in Mainland China.

China A Share Leaders Review

During the 12-month period ended March 31, 2023 (the Period), the Fund’s holdings were somewhat skewed towards growth and consumer industries. As a result, they were negatively impacted by China’s pandemic lockdowns at the beginning of the Period. Furthermore, declines in the prices of equities of real estate developers in connection with the government’s campaign to deleverage real estate developers also negatively impacted the Fund’s performance for the Period.

Still, during the Period the Fund outperformed the broader China equity market, as represented by the MSCI China Index. Further, we remain confident in the smart-beta approach to investing in China’s onshore (A Share/Mainland) equity market and CICC’s research process as represented in the Underlying Index, including because the Underlying Index generated a return profile that was significantly less volatile than the MSCI China Index during the Period.

The best performing sector within the Fund was Communication Services. Meanwhile, companies in the Real Estate sector detracted the most of any single sector from the Fund’s performance.

For the Period, the NAV of the Fund decreased by -13.15% while the Underlying Index decreased by -12.51%. The deviation between the Fund’s performance and that of the Underlying Index can be mainly attributed to management fees.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares CICC China Leaders 100 Index ETF (continued)

Growth of a $10,000 Investment‡

(at Net Asset Value)‡

AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED MARCH 31, 2023*

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares CICC China Leaders 100 Index ETF (concluded)

The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that, when redeemed, shares may be worth less than their original cost. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. For performance data current to the most recent month end, please call 855-857-2638 or visit www.kraneshares.com. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike a Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the index returns, the performance would have been lower. As stated in the Fund’s prospectus, the Fund’s operating expense ratio is 0.68%. Please note that one cannot invest directly in an unmanaged index. There are no assurances that the Fund will meet its stated objectives. The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities. For further information on the Fund’s objectives, risks, and strategies, see the Fund’s prospectus. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares CSI China Internet ETF

The KraneShares CSI China Internet ETF (the Fund) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the CSI Overseas China Internet Index (the Underlying Index).

The Underlying Index is designed to measure the performance of the investable universe of publicly traded, China-based companies whose primary business or businesses are in the Internet and Internet-related sectors (China Internet Companies), as defined by the index sponsor, China Securities Index Co., Ltd. (CSI).

China Internet Review

Although global markets saw declines due to rising global interest rates, U.S. and Hong Kong-listed stocks of Chinese internet issuers saw positive catalysts during the 12-month period ended March 31, 2023 (the Period) as many of the geopolitical and policy-related issues that had been weighing on the sector in prior periods were resolved. We believe that the two most important developments for the sector during the Period were the China government’s removal of pandemic restrictions and the achievement of full access to the audit books of U.S.-listed, China-based firms by the U.S. Public Company Accounting Oversight Board (PCAOB).

Following the National Party Congress, held in October of 2022, China’s government removed all domestic, pandemic-related restrictions. This development improved the outlook for China’s consumer market and led to a rebound in the stock price of certain China Internet Companies.

On December 15th, 2022, the PCAOB announced that the agency had secured complete access to inspect and investigate China-based firms and their auditors for the first time in history. This announcement was significant for China Internet Companies, many of which are listed publicly in the U.S., because the U.S. Congress in 2022, required U.S.-listed foreign companies to allow the PCAOB to inspect their audit books to remain listed publicly on U.S. exchanges. This development significantly reduced the risk of the American depositary receipts (ADRs) of China Internet Companies being delisted from U.S. exchanges.

We see three potential positive catalysts for China Internet Companies in the year to come:

China capital market overview (April 1, 2022 to March 31, 2023)

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares CSI China Internet ETF (continued)

For the Period, the NAV of the Fund increased by 5.86%, while the Underlying Index increased by 6.36%. The deviation between the Fund’s performance and that of the Underlying Index can be mainly attributed to management fees.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares CSI China Internet ETF (continued)

Growth of a $10,000 Investment‡

(at Net Asset Value)‡

AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED MARCH 31, 2023*

The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that, when redeemed, shares may be worth less than their original cost. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. For performance data current to the most recent month end, please call 855-857-2638 or visit www.kraneshares.com. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike a Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the index returns, the performance would have been lower. As stated in the Fund’s prospectus, the Fund’s operating expense ratio is 0.69%. Please note that one cannot invest directly in an unmanaged index. There are no assurances that the Fund will meet its stated objectives. The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities. For further information on the

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares CSI China Internet ETF (concluded)

Fund’s objectives, risks, and strategies, see the Fund’s prospectus. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Bosera MSCI China A 50 Connect Index ETF

The KraneShares Bosera MSCI China A 50 Connect Index ETF (the Fund) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the MSCI China A 50 Connect Index (the Underlying Index).

The Underlying Index is constructed from the MSCI China A Index (the Parent Index), a broad-based benchmark index, which captures large and mid-cap China A shares listed on the Shanghai and Shenzhen exchanges and accessible through the Northbound Stock Connect channel. The Underlying Index aims to reflect the performance of the 50 largest securities representing each Global Industry Classification Standard (GICS^®) sector and reflecting the sector weight allocation of the Parent Index.

China A Share Review

Several macroeconomic headwinds impacted the Fund’s performance during the 12-month period ended March 31, 2023 (the Period), including a slump in consumer demand stemming from pandemic restrictions in China and the strengthening of the U.S. dollar due to the most aggressive interest rate hiking cycle in history from the U.S. Federal Reserve, which weighed on the value of assets denominated in currencies other than the U.S. Dollar, including China’s Renminbi. Although pandemic restrictions were removed during the period, benefiting consumer-oriented holdings, the Fund’s holdings in other sectors, such as Information Technology and Financials, nonetheless detracted from its overall performance for the period.

We see three potential positive catalysts for China’s A share equity market in the year to come:

China capital market overview (April 1, 2022 to March 31, 2023)

The Fund had exposure to Communication Services and Consumer Discretionary, which contributed positively to its performance, and to Real Estate and Information Technology, which detracted from its performance. The Fund’s performance was also negatively impacted by the decline in the value of China’s currency, the Renminbi, compared to the U.S. dollar.

For the Period, the NAV of the Fund decreased by -12.63% while the Underlying Index decreased by -11.57%. The deviation between the Fund’s performance and that of the Underlying Index can be mainly attributed to management fees and currency translations. 

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Bosera MSCI China A 50 Connect Index ETF (continued)

Growth of a $10,000 Investment‡

(at Net Asset Value)‡

AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED MARCH 31, 2023*

The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that, when redeemed, shares may be worth less than their original cost. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future performance and should not be considered as a

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Bosera MSCI China A 50 Connect Index ETF (concluded)

representation of the future results of the Fund. For performance data current to the most recent month end, please call 855-857-2638 or visit www.kraneshares.com. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike a Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the index returns, the performance would have been lower. As stated in the Fund’s prospectus, as supplemented, the Fund’s gross operating expense ratio is 0.79% and its net expense ratio is 0.56% due to a Fee Waiver whereby the Fund’s investment manager, Krane Funds Advisors, LLC, has contractually agreed to reduce its management fee by 0.23% of the Fund’s average daily net assets until August 1, 2023. Please note that one cannot invest directly in an unmanaged index. There are no assurances that the Fund will meet its stated objectives. The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities. For further information on the Fund’s objectives, risks, and strategies, see the Fund’s prospectus. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Bloomberg China Bond Inclusion Index ETF

The KraneShares Bloomberg China Bond Inclusion Index ETF (the Fund) seeks to provide investment results that, before expenses and fees, correspond generally to the price and yield performance of the Bloomberg China Inclusion Focused Bond Index (the Underlying Index).

The underlying index is designed to track the performance of China’s onshore, renminbi-denominated bond market.

China Investment Grade & Government Bond Market Review

China’s high-quality bonds moved lower during the 12-month period ended March 31, 2023 (the Period) primarily due to global central banks hiking interest rates while China kept rates steady, making China’s risk-free rate less attractive to investors. Nonetheless, as the People’s Bank of China’s target rates remain relatively unchanged since the end of 2021, high quality bonds were remarkably stable during the period, especially compared to high quality bonds in the U.S., realized losses on which resulted in the collapse or near-collapse of multiple banks.

We see three potential positive catalysts for China’s investment grade and government bond market going forward:

For the Period, the NAV of the Fund decreased by -3.98% while the Underlying Index decreased by -4.82%. The deviation between the Fund’s performance and that of the Underlying Index can be mainly attributed to management fees and the Fund sampling the Underlying Index rather than replicating it.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Bloomberg China Bond Inclusion Index ETF (continued)

Growth of a $10,000 Investment‡

(at Net Asset Value)‡

AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED MARCH 31, 2023*

The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that, when redeemed, shares may be worth less than their original cost. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. For performance data current to the most recent month end, please call 855-857-2638 or visit www.kraneshares.com. The Fund’s performance

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Bloomberg China Bond Inclusion Index ETF (concluded)

assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike a Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the index returns, the performance would have been lower. As stated in the Fund’s prospectus, the Fund’s gross operating expense ratio is 0.68% and its net expense ratio is 0.48% due to a Fee Waiver Agreement whereby the Fund’s investment manager, Krane Funds Advisors, LLC, has contractually agreed to reduce its management fee by 0.20% of the Fund’s average daily net assets until August 1, 2023. Please note that one cannot invest directly in an unmanaged index. There are no assurances that the Fund will meet its stated objectives. The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities. For further information on the Fund’s objectives, risks, and strategies, see the Fund’s prospectus. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI All China Index ETF

The KraneShares MSCI All China Index ETF (the Fund) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the MSCI China All Shares Index (the Underlying Index).

The Underlying Index seeks to track the equity market performance of companies based in China and listed in Mainland China, Hong Kong, and the United States. Companies available for inclusion must be headquartered in China and meet the market capitalization minimums required by the MSCI Global Investable Market Indexes Methodology.

Broad China Equity Market Review

Offshore China equities outpaced onshore China (Mainland/A Shares) during the 12-month period ended March 31, 2023 (the Period) due to a strong rebound from 2022 lows. Meanwhile, onshore China (Mainland/A Shares) exhibited significantly less volatility, though underperformed. We believe the past 12 months’ performance disparity between onshore China (Mainland/A Shares) and offshore China demonstrates why a balanced allocation to both is important to achieve a well-rounded China allocation.

We see three potential positive catalysts for broad China equities in the year to come:

China capital market overview (April 1, 2022 to March 31, 2023)

Within the Fund, as a result, the best-performing sectors for the Period were Energy and Communication Services. Meanwhile, the worst-performing sectors were Real Estate and Materials.

For the Period, the NAV of the Fund decreased by -6.44% while the Underlying Index decreased by -6.44%.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI All China Index ETF (continued)

Growth of a $10,000 Investment‡

(at Net Asset Value)‡

AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED MARCH 31, 2023*

The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that, when redeemed, shares may be worth less than their original cost. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. For performance data current to the most recent month end, please call 855-857-2638 or visit www.kraneshares.com. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike a Fund’s returns, do not reflect any fees or expenses. If such fees and

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI All China Index ETF (concluded)

expenses were included in the index returns, the performance would have been lower. As stated in the Fund’s prospectus, the Fund’s gross operating expense ratio is 0.68% and its net expense ratio is 0.48% due to an a Fee Waiver whereby the Fund’s investment manager, Krane Funds Advisors, LLC, has contractually agreed to reduce its management fee by 0.20% of the Fund’s average daily net assets until August 1, 2023. Please note that one cannot invest directly in an unmanaged index. There are no assurances that the Fund will meet its stated objectives. The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities. For further information on the Fund’s objectives, risks, and strategies, see the Fund’s prospectus. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI One Belt One Road Index ETF

The KraneShares MSCI One Belt One Road Index ETF (the Fund) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the MSCI Global China Infrastructure Exposure Index (the Underlying Index).

The Underlying Index aims to identify potential beneficiaries of the “Belt & Road” or “One Belt One Road” (OBOR) initiative based on how their geography, revenue, and sector attributes align with the broad theme. OBOR seeks to capture the economic growth and monetize the potential upside for the companies involved in China’s One Belt One Road initiative.

Emerging Markets/Belt & Road Review

China launched the “Belt & Road Initiative” or “One Belt One Road” (OBOR) in 2013. The Belt & Road Initiative is an infrastructure development strategy that was designed by the government to allow China to export any excess infrastructure construction capacity to other regions of the world.

The emerging markets (EM) economies included in China’s Belt & Road Initiative were adversely impacted by a steady increase in the value of the U.S. dollar during the 12-month period ended March 31, 2023 (the Period). In this regard, their U.S. dollar-denominated debts became more of a burden across the board, although certain commodity-exporting EM countries in the Belt & Road Initiative contemporaneously benefitted from rising oil prices.

The challenges faced by Belt & Road Initiative countries and issuers during the Period have included economic crises in Pakistan and Sri Lanka. These crises have threatened ongoing projects in both countries. In response, China’s Export-Import Bank has extended the deadline for repayment of principal and interest on loans to Sri Lanka by two years, and the China Development Bank has extended another $700 million in loans to Pakistan to help the country whether further challenges. Compounding the challenges for Belt & Road Initiative countries, however, has been the unclear status of Italy as a signatory within the Initiative.

Nonetheless, OBOR-related projects are likely to continue as various EM economies emerge from economic crises, and Italy’s new center-right ruling coalition may clarify the status of the partnership. Moreover, OBOR-funded energy projects in the Middle East may continue to benefit from China’s reopening and heightened prices for oil and gas.

We see three potential positive catalysts for OBOR-related equities in the year to come:

Emerging Markets Overview (April 1, 2022 to March 31, 2023)

Emerging Market equities, as measured by the MSCI Emerging Markets Index, were down for the period, returning -10.39%.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI One Belt One Road Index ETF (continued)

The best performing sectors across the Emerging Market equity market included Energy (+4.22%), Consumer Staples (-0.08%), and Consumer Discretionary (-3.86%).

The worst performing sectors across the Emerging Market equity market included Health Care (-15.02%), Materials (-15.21%), and Real Estate (-16.16%).

Within the Fund, the best-performing sectors for the period were Energy and Industrials. Meanwhile, the worst-performing sectors were Consumer Staples and Materials. At the end of the Period, the top country weights within the Fund were China, Singapore, and Kuwait.

For the Period, the NAV of the Fund decreased by -14.98% while the Underlying Index decreased by -14.69%. The deviation between the Fund’s performance and that of the Underlying Index can be mainly attributed to management fees.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI One Belt One Road Index ETF (continued)

Growth of a $10,000 Investment‡

(at Net Asset Value)‡

AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED MARCH 31, 2023*

The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that, when redeemed, shares may be worth less than their original cost. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. For performance data current to the most recent month end, please call 855-857-2638 or visit www.kraneshares.com. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike a Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the index returns, the performance would have been lower. As stated in the Fund’s prospectus, the Fund’s operating expense ratio is 0.78%. Please note that one cannot invest directly in an unmanaged index. There are no assurances that the Fund will meet its stated objectives. The Fund’s holdings and allocations are subject to change and should

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI One Belt One Road Index ETF (concluded)

not be considered recommendations to buy individual securities. For further information on the Fund’s objectives, risks, and strategies, see the Fund’s prospectus. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Emerging Markets Consumer Technology Index ETF

The KraneShares Emerging Markets Consumer Technology Index ETF (the Fund) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Solactive Emerging Markets Consumer Technology Index (the Underlying Index).

The Underlying Index selects companies from 26 eligible countries within emerging markets whose primary business or businesses are internet retail, internet software/services, purchase, payment processing, or software for internet and E-Commerce transactions.

Emerging Markets Consumer Technology Review

Many emerging markets (EM) countries were adversely impacted by a steady increase in the value of the U.S. dollar during the 12-month period ended March 31, 2023 (the Period), which meant that their U.S. dollar-denominated debts became more of a burden. However, certain commodity-exporting EM countries benefitted from rising oil prices, and e-commerce companies held by the Fund, especially those which derive significant revenues from China, experienced a recovery during the Period when China removed pandemic restrictions.

The International Monetary Fund has predicted that the growth gap between developed and emerging markets will favor the latter for the first time in nearly a decade. Developed economies are anticipated to experience a slowdown in growth from 2.7% in 2022 to 1.2% and 1.4% in 2023 and 2024, respectively. On the other hand, EM economies are expected to experience growth, increasing from 3.9% in 2022 to 4.0% in 2023 and 4.3% in 2024.

We see three potential positive catalysts for EM consumer technology companies in the year to come:

Emerging Markets Overview (April 1, 2022 to March 31, 2023)

Within the Fund, exposure to the Consumer Discretionary and Consumer Staples sectors contributed positively to performance, while its exposure to the Communication Services and Financials sectors detracted from performance.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Emerging Markets Consumer Technology Index ETF (continued)

For the Period, the NAV of the Fund decreased by -15.30% while the Underlying Index decreased by -14.47%. The deviation between the Fund’s performance and that of the Underlying Index can be mainly attributed to management fees and currency translations.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Emerging Markets Consumer Technology Index ETF (continued)

Growth of a $10,000 Investment‡

(at Net Asset Value)‡

AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED MARCH 31, 2023*

The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that, when redeemed, shares may be worth less than their original cost. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. For performance data current to the most recent month end, please call 855-857-2638 or visit www.kraneshares.com. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike a Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the index returns, the performance would have been lower. As stated in the Fund’s prospectus, the Fund’s gross operating expense ratio is 0.79% and its net expense ratio

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Emerging Markets Consumer Technology Index ETF (concluded)

is 0.59% due to a Fee Waiver whereby the Fund’s investment manager, Krane Funds Advisors, LLC, has contractually agreed to reduce its management fee by 0.20% of the Fund’s average daily net assets until August 1, 2023.

Please note that one cannot invest directly in an unmanaged index. There are no assurances that the Fund will meet its stated objectives. The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities. For further information on the Fund’s objectives, risks, and strategies, see the Fund’s prospectus. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI China Clean Technology Index ETF

The KraneShares MSCI China Clean Technology Index ETF (the Fund) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the MSCI China IMI Environment 10/40 Index (the Underlying Index).

The Underlying Index is comprised of securities that derive at least 50% of their revenues from environmentally beneficial products and services. The Underlying Index is based on five key Clean Technology environmental themes: Alternative Energy, Sustainable Water, Green Building, Pollution Prevention, and Energy Efficiency. The Underlying Index aims to serve as a benchmark for investors seeking exposure to Chinese companies that focus on contributing to a more environmentally sustainable economy by making efficient use of scarce natural resources or by mitigating the impact of environmental degradation. Constituent selection is based on data from MSCI Environment, Social, and Governance (ESG).

China Clean Technology Review:

Several macroeconomic headwinds impacted the Fund’s performance during the 12-month period ending March 31, 2023 (the Period), including the most aggressive interest rate hiking cycle in history from the U.S. Federal Reserve. On the other hand, the passage of the Inflation Reduction Act (IRA) in the U.S. favors U.S. suppliers of clean energy technologies, such as solar panels, and the clean technology companies generally held by the Fund.

The best-performing sector within the Fund was Information Technology, while the worst-performing sectors were Real Estate and Utilities. Information technology company Kingsoft Cloud was one of the best-performing companies in the Fund. Meanwhile, real estate developers YueXiu and Soho saw declines following a slump in China’s real estate sector.

We see three potential positive catalysts for China’s clean technology equities in the year to come:

For the Period, the NAV of the Fund decreased by -20.71% while the Underlying Index decreased by -21.68%. The deviation between the Fund’s performance and that of the Underlying Index can be mainly attributed to management fees and currency translations.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI China Clean Technology Index ETF (continued)

Growth of a $10,000 Investment‡

(at Net Asset Value)‡

AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED MARCH 31, 2023*

The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that, when redeemed, shares may be worth less than their original cost. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. For performance data current to the most recent month end, please call 855-857-2638 or visit www.kraneshares.com. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike a Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the index returns, the performance would have been lower. As stated in the Fund’s prospectus, the Fund’s gross operating expense ratio is 0.78%. Please note that one cannot invest directly in an unmanaged index. There are no assurances that the Fund will meet its stated objectives. The Fund’s holdings and allocations are subject to change and should

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI China Clean Technology Index ETF (concluded)

not be considered recommendations to buy individual securities. For further information on the Fund’s objectives, risks, and strategies, see the Fund’s prospectus. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Electric Vehicles and Future Mobility Index ETF

The KraneShares Electric Vehicle and Future Mobility Index ETF (the Fund) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Bloomberg Electric Vehicles Index (the Underlying Index).

The Underlying Index seeks to measure the performance of companies that are engaged in the production of electric vehicles, their components, or other initiatives that may change the future of mobility. This includes issuers engaged in electric vehicles, autonomous driving, lithium and/ or copper production, lithium-ion/lead acid battery production, hydrogen fuel cell manufacturing, and/or electric infrastructure businesses.

Global Electric Vehicle Market Review:

Global electric vehicles equities were mostly flat during the 12-month period ended March 31, 2023 (the Period) as higher U.S. interest rates made growth equities appear less attractive. Nonetheless, sales of electric vehicles (EVs) continued to rise. EV sales increased +60% to reach 10.3 million vehicles in 2022, up from 6.5 million vehicles in 2021. China continued to lead in sales as 6 million EVs were sold in China during 2022. Meanwhile, Europe and the U.S. tracked behind, logging sales of 2.6 million and 800,000 EVs, respectively.

We see three potential positive catalysts for EV equities in the year to come:

For the Period, the NAV of the Fund decreased by -21.78% while the Underlying Index decreased by -21.56%. The deviation between the Fund’s performance and that of the Underlying Index can be mainly attributed to management fees.

Companies involved in battery production were among the best performing of the Fund’s holdings during the Period. Meanwhile, companies involved in hydrogen and fuel cell technologies, charging technologies, and vehicle production detracted the most from the Fund’s performance for the period.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Electric Vehicles and Future Mobility Index ETF (continued)

Growth of a $10,000 Investment‡

(at Net Asset Value)‡

AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED MARCH 31, 2023*

The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that, when redeemed, shares may be worth less than their original cost. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. For performance data current to the most recent month end, please call 855-857-2638 or visit www.kraneshares.com. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike a Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the index returns, the performance would have been lower. As stated in the Fund’s prospectus, the Fund’s operating expense ratio is 0.70%. Please note that

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Electric Vehicles and Future Mobility Index ETF (concluded)

one cannot invest directly in an unmanaged index. There are no assurances that the Fund will meet its stated objectives. The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities. For further information on the Fund’s objectives, risks, and strategies, see the Fund’s prospectus. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI All China Health Care Index ETF

The KraneShares MSCI All China Health Care Index ETF (the Fund) seeks to provide investment results that, before fees and expenses, track the price and yield performance of the MSCI China All Shares Health Care 10/40 Index (the Underlying Index).

The Underlying Index is a free float-adjusted market capitalization weighted index designed to track the equity market performance of Chinese companies engaged in the health care sector. The securities in the Index include all types of publicly issued shares of Chinese issuers, which are listed in Mainland China, Hong Kong, and the United States. Issuers eligible for inclusion must be classified under the Global Industry Classification Standard (GICS^®) as engaged in the healthcare sector. The issuers included in the Underlying Index may include small-cap, mid-cap, and large-cap companies.

China Health Care Review:

Several macroeconomic headwinds impacted the Fund’s performance during the 12-month period ended March 31, 2023 (the Period), including an aggressive rate hiking cycle pursued by global central banks, which made growth equities appear less attractive due to the resulting increase in the risk-free rates in many countries, the placement of some China-based pharmaceutical companies on the U.S. “unverified list,” indicating that the end-use of imported materials could not be verified by U.S. inspectors due to COVID restrictions, and regulatory changes to China’s central procurement program, especially the inclusion of medical devices in the program.

We see three potential positive catalysts for China’s healthcare equities in the year to come:

The best-performing industries within the Fund were medical/nursing services and medical distributors. Meanwhile, pharmaceuticals and biotechnology were the worst-performing industries within the Fund.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI All China Health Care Index ETF (continued)

For the Period, the NAV of the Fund decreased by -12.65% while the Underlying Index decreased by -12.43%. The deviation between the Fund’s performance and that of the Underlying Index can be mainly attributed to management fees.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI All China Health Care Index ETF (continued)

Growth of a $10,000 Investment‡

(at Net Asset Value)‡

AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED MARCH 31, 2023*

The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that, when redeemed, shares may be worth less than their original cost. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. For performance data current to the most recent month end, please call 855-857-2638 or visit www.kraneshares.com. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike a Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the index returns, the performance would have been lower. As stated in the Fund’s prospectus, the Fund’s gross operating expense ratio is 0.79% and its net expense ratio is 0.65% due to a Fee Waiver whereby the Fund’s investment manager, Krane Funds Advisors, LLC, has contractually agreed to reduce its management fee by 0.14% of the Fund’s average daily

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI All China Health Care Index ETF (concluded)

net assets until August 1, 2023. Please note that one cannot invest directly in an unmanaged index. There are no assurances that the Fund will meet its stated objectives. The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities. For further information on the Fund’s objectives, risks, and strategies, see the Fund’s prospectus. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Asia Pacific High Income Bond ETF

The KraneShares Asia Pacific High Income Bond ETF (the Fund) seeks to provide a total return that, before fees and expenses, exceeds that of the JP Morgan Asia Credit Index (JACI) Non-Investment Grade Corporate Index (the Benchmark Index) over a complete market cycle.

The Benchmark Index is comprised of liquid U.S. dollar denominated debt instruments issued out of Asia ex-Japan. It is based on the composition and established methodology of the J.P. Morgan Asia Credit Index (JACI), which is market capitalization weighted. The Benchmark Index is limited to issuers classified as non-investment grade based on the middle rating among Moody’s, Fitch, and S&P.

Asia High Yield Bond Market Review:

Asia’s high yield bond market was relatively unchanged from the prior year during the 12-month period ended March 31, 2023 (the Period) as the slump in China’s real estate market, stemming from tightening government policies that were introduced in 2021 and included the “three red lines” policy limiting developer leverage, continued to weigh on the performance of Asia’s high yield bond market. However, positive signs of a recovery emerged in the first quarter of 2023, including the stabilization of home prices in January following 16 consecutive months of price declines.

Portfolio manager Wai Hoong Leong and his Singapore-based team reversed from their high cash position of 18% in the second quarter of 2022 to under 10% by the end of the Period due to improving credit conditions. The team also reversed its underweights versus the benchmark to the Real Estate and Consumer Discretionary sectors from the beginning of the Period, while keeping duration lower than the Benchmark Index.

We see three potential positive catalysts for the Asia high yield bond market going forward:

For the Period, the NAV of the Fund decreased by -0.44% while the Benchmark Index decreased by -0.62%.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Asia Pacific High Income Bond ETF (continued)

Growth of a $10,000 Investment‡

(at Net Asset Value)‡

AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED MARCH 31, 2023*,^† 

The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that, when redeemed, shares may be worth less than their original cost. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. For performance data current to the most recent month end, please call 855-857-2638 or visit www.kraneshares.com. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike a Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the index returns, the performance would have been lower.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Asia Pacific High Income Bond ETF (concluded)

As stated in the Fund’s prospectus, the Fund’s operating expense ratio is 0.69%. Please note that one cannot invest directly in an unmanaged index. There are no assurances that the Fund will meet its stated objectives. The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities. For further information on the Fund’s objectives, risks, and strategies, see the Fund’s prospectus. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Emerging Markets Healthcare Index ETF

The KraneShares Emerging Markets Healthcare Index ETF (the Fund) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Solactive Emerging Markets Healthcare Index (the Underlying Index).

The Underlying Index seeks to track the equity market performance of companies engaged in the health care sector in various emerging markets. The issuers include small-cap, mid-cap, and large-cap companies involved in hospital management, healthcare management, pharmaceutical manufacturing, and biotechnology, among other sub-industries.

Emerging Markets Healthcare Review:

During the 12-month period ended March 31, 2023 (the Period), emerging market (EM) healthcare companies continued to build on the progress made in response to the pandemic. They continued to rapidly expand their virtual health services for patients and establish partnerships with developed market companies to produce and/or acquire vaccines, treatments, and equipment. Within the Fund, the best-performing holdings were mainly involved in the healthcare technology and medical devices industries. Meanwhile, the worst-performing holdings were mainly those involved in healthcare facilities management and biotechnology industries.

The Fund was down for the Period as a strong U.S. dollar and rising U.S. interest rates continued to weigh on EM and growth equities. Meanwhile, waning demand for COVID vaccines and concerns over future funding both had a negative impact on the global biotechnology industry. Brazil’s private healthcare industry was particularly hard-hit as provider Hapvida has had to grapple with tightening credit conditions and newly elected President Lula da Silva’s plans to make public healthcare more competitive with private alternatives.

We see three potential positive catalysts for EM healthcare equities in the year to come:

Emerging Markets Overview (March 31, 2022 to March 31, 2023)

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Emerging Markets Healthcare Index ETF (continued)

For the Period, the NAV of the Fund decreased by -14.97% while the Underlying Index decreased by -14.90%. The deviation between the Fund’s performance and that of the Underlying Index can be mainly attributed to management fees.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Emerging Markets Healthcare Index ETF (continued)

Growth of a $10,000 Investment‡

(at Net Asset Value)‡

AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED MARCH 31, 2023*

The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that, when redeemed, shares may be worth less than their original cost. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. For performance data current to the most recent month end, please call 855-857-2638 or visit www.kraneshares.com. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike a Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the index returns, the performance would have been lower. As stated in the Fund’s prospectus, the Fund’s operating expense ratio is 0.79%. Please note that one cannot invest directly in an unmanaged index. There are no assurances that the Fund will meet its stated objectives. The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities. For further information on the

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares Emerging Markets Healthcare Index ETF (concluded)

Fund’s objectives, risks, and strategies, see the Fund’s prospectus. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI Emerging Markets ex China Index ETF

The KraneShares MSCI Emerging Markets ex China Index ETF (the Fund) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the MSCI Emerging Markets ex China Index (the Underlying Index).

The Underlying Index is a free float-adjusted market capitalization weighted index designed to track the equity market performance of mid- and large-cap companies of emerging market countries, excluding China. The Underlying Index is based on the MSCI Emerging Markets Index (universe) but excludes the securities of Chinese issuers.

Emerging Markets ex China Review:

Emerging markets (EM) excluding China (EM ex China) were adversely impacted by a steady increase in the value of the U.S. Dollar during the 12-month period ended March 31, 2023 (the Period), which meant that their U.S. Dollar-denominated debts became more of a burden. However, many commodity-exporting EM countries benefitted from heightened oil prices; and consumer-oriented stocks recovered somewhat. Meanwhile, South Korea and Taiwan lagged due to slowing global demand for their semiconductor exports. Due to the latter’s higher weight in the Fund’s Underlying Index, these opposing forces negatively impacted the Fund’s performance.

We see three potential positive catalysts for EM ex China equities in the year to come:

Emerging Markets Overview (April 1, 2022 to March 31, 2023)

Within the Fund, exposure for the Period to the Consumer Discretionary and Consumer Staples sectors benefitted the Fund, while exposure to the Communication Services and Financials sectors detracted from Fund performance. The best-performing country exposure for the Fund was Turkey, and the worst-performing country exposure was Colombia.

For the Period, the NAV of the Fund decreased by -12.12% while the Underlying Index decreased by -13.32%. The deviation between the Fund’s performance and that of the Underlying Index can be mainly attributed to management fees and the Fund’s usage of representative sampling to seek to track the Underlying Index’s performance.

Management Discussion of Fund Performance (Unaudited) (continued)

KraneShares MSCI Emerging Markets ex China Index ETF (continued)

Growth of a $10,000 Investment‡

(at Net Asset Value)‡

AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED MARCH 31, 2023*