# EDGAR Filing Document

**Accession Number:** 0001547576
**File Stem:** 0001829126-25-004317
**Filing Date:** 2025-6
**Character Count:** 136296
**Document Hash:** fd73e2d990d760117d13790f3ff735c0
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001829126-25-004317.hdr.sgml**: 20250606

**ACCESSION NUMBER**: 0001829126-25-004317

**CONFORMED SUBMISSION TYPE**: N-CSR

**PUBLIC DOCUMENT COUNT**: 29

**CONFORMED PERIOD OF REPORT**: 20250331

**FILED AS OF DATE**: 20250606

**DATE AS OF CHANGE**: 20250606

**EFFECTIVENESS DATE**: 20250606

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Krane Shares Trust
- **CENTRAL INDEX KEY:** 0001547576

**ORGANIZATION NAME:**
- **EIN:** 456861457
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0331

**FILING VALUES:**
- **FORM TYPE:** N-CSR
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-22698
- **FILM NUMBER:** 251030457

**BUSINESS ADDRESS:**
- **STREET 1:** 280 PARK AVENUE
- **STREET 2:** 32ND FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10017
- **BUSINESS PHONE:** 212-933-0393

**MAIL ADDRESS:**
- **STREET 1:** 280 PARK AVENUE
- **STREET 2:** 32ND FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10017

## Series and Classes Contracts Data

### Quadratic Interest Rate Volatility and Inflation Hedge ETF (Series ID: S000065362)

| Class ID   | Class Name                                                 | Ticker Symbol   |
|:---|:---|:---|
| C000211437 | Quadratic Interest Rate Volatility and Inflation Hedge ETF | IVOL            |

### Quadratic Deflation ETF (Series ID: S000070938)

| Class ID   | Class Name              | Ticker Symbol   |
|:---|:---|:---|
| C000225265 | Quadratic Deflation ETF | BNDD            |

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM N-CSR**

**CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT** 

**INVESTMENT COMPANIES**

**Investment Company Act File Number 811-22698**

**KraneShares Trust**

(Exact name of registrant as specified in charter)

280 Park Avenue, 32nd Floor

New York, New York 10017

(Address of principal executive offices) (Zip code)

Jonathan Krane

KraneShares Trust

280 Park Avenue, 32nd Floor

New York, New York 10017

(Name and address of agent for service)

Copy to:

Stacy L. Fuller

K&L Gates LLP

1601 K Street NW

Washington, DC 20006-1600

**Registrant's telephone number, including area code: (212) 933-0393**

**Date of fiscal year end: March 31, 2025**

**Date of reporting period: March 31, 2025**

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

**Item 1. Reports to Stockholders.**

(a) A copy of the report transmitted
 to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the "Act") [17 CFR § 270.30e-1],
 is attached hereto.

## KraneShares Trust
![Image](i7ce345e970cf6093eb33245e.jpg)

![Image](ief9396626e19585199774660.jpg)

# Quadratic Interest Rate Volatility and Inflation Hedge ETF

## Ticker: IVOL

#### Principal Listing Exchange: NYSE Arca

## Annual Shareholder Report: March 31, 2025
This annual shareholder report contains important information about the Quadratic Interest Rate Volatility and Inflation Hedge ETF (the "Fund") for the period from April 1, 2024 to March 31, 2025. You can find additional information about the Fund at https://kfafunds.com/ivol/. You can also request this information by contacting us at 1-833-IVOL-ETF (1-833-486-5383).

## What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)

---

| | | |
|:---|:---|:---|
| **<u>Fund Name</u>** | **<u>Costs of a $10,000 investment</u>** | **<u>Costs paid as a percentage of a $10,000 investment</u>** |
| Quadratic Interest Rate Volatility and Inflation Hedge ETF | $101 | 1.00% |

---

## How did the Fund perform in the last year?
During the Funds' fiscal year ended March 31, 2025 ("the period"), the macro environment was challenging. At the beginning of 2024, 150 bps of Fed cuts were priced in, but the Fed ultimately delivered only 100 bps of cuts. Major central banks across the world tried to balance the risk of persistently high inflation with the risk of keeping interest rates too high and pushing economies into recession. As the year passed, investors grew less concerned with inflation and more concerned about a potential recession. There remains a persistent concern with the high U.S. Federal deficit and its impact on the government's overall debt servicing costs.

More recently in 2025, the headlines have been focused on the new administration as it imposes new tariffs and negotiates trade deals with other countries. It is still unclear how this process will play out and how it will impact the economy. A significant amount of uncertainty remains, and markets are likely still not pricing in the vast array of outcomes.

IVOL is a fixed income ETF that seeks to hedge relative interest rate movements, whether these movements arise from falling short-term interest rates or rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, while providing the potential for enhanced inflation-protected income.

During the period, IVOL underperformed an index of TIPS alone. (Please note that this passive bond index is provided for comparative purposes only, as the fund's strategy is benchmark agnostic.) This was a result of IVOL's options positions losing value. Specifically, implied volatility fell, and the spot curve did not meet where the forward curve was priced. Instead, the curve steepened far less than expected and flattened the forwards as a result of fewer Fed cuts than were expected. The spot curve only reverted to a positive slope in early 2025, after having been inverted since mid-2022. This was the longest period of inversion since 1978, when the data became available, and this multi-year inversion negatively impacted IVOL's performance.

#### How did the Fund perform since inception?

## Total Return Based on $10,000 Investment
![Growth Chart](id09f6d7df4046803619f2651.jpg)

---

| | | |
|:---|:---|:---|
| | **Quadratic Interest Rate Volatility and Inflation Hedge ETF - $9217** | **Bloomberg U.S. Treasury Inflation-Linked Bond Index (TR) (USD) - $11941** |
| **May/19** | $10000 | $10000 |
| **Mar/20** | $10695 | $10628 |
| **Mar/21** | $12155 | $11429 |
| **Mar/22** | $11319 | $11919 |
| **Mar/23** | $10419 | $11196 |
| **Mar/24** | $9033 | $11247 |
| **Mar/25** | $9217 | $11941 |

---

## Average Annual Total Returns as of March 31, 2025

---

| | | | |
|:---|:---|:---|:---|
| **<u>Fund/Index Name</u>** | **<u>1 Year</u>** | **<u>5 Years</u>** |  **<u>Since Inception</u>** |
| Quadratic Interest Rate Volatility and Inflation Hedge ETF | 2.03% | -2.93% | -1.38% |
| Bloomberg U.S. Treasury Inflation-Linked Bond Index (TR) (USD) | 6.17% | 2.36% | 3.06% |

---

The line graph represents historical performance of a hypothetical investment of $10,000 in the Fund since its inception on May 13, 2019. Returns shown are total returns, which assume the reinvestment of dividends and capital gains. The table and graph presented above do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. **Past performance is not indicative of future performance.**Call 1-833-IVOL-ETF (1-833-486-5383) or visit https://kfafunds.com/ivol/ for current month-end performance.

## Key Fund Statistics as of March 31, 2025

---

| | | |
|:---|:---|:---|
| **Total Net Assets** | **Total Advisory Fees Paid** | **Portfolio Turnover Rate** |
| $477783321<sub>8</sub> | $6028220 | 0% |

---

#### What did the Fund invest in?

#### Asset Weightings<sup>Footnote Reference \*</sup><sup>Footnote Reference ^</sup>
![Group By Sector Chart](i1295ee9c2c42ff5fb1a571d7.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| Purchased Options<sup>Footnote Reference(1)</sup> | 13.7% |
| Exchange Traded Funds | 79.8% |

---

---

| | |
|:---|:---|
| Footnote | Description |
| &nbsp;&nbsp;Footnote<sup>\*</sup> | &nbsp;&nbsp;Percentages are calculated based on total net assets. |
| &nbsp;&nbsp;Footnote<sup>^</sup> | &nbsp;&nbsp;Investments as a percentage of total net assets will not add up to 100% because this chart does not include cash and other assets and liabilities. The difference between 100% and the sum of the percentages above is mostly cash held by the fund. |
| &nbsp;&nbsp;Footnote<sup>(1)</sup> | &nbsp;&nbsp;At market value. |

---

### Top Holdings

---

| | |
|:---|:---|
| **<u>Holding Name</u>** | **<u>Percentage of Total Net Assets</u>** |
| Schwab US TIPS ETF | 79.8% |
| Purchased Option - CMS 10Y - 2Y, 0.05%, 04/08/26, <sup>Footnote Reference(1)</sup> | 4.1% |
| Purchased Option - CMS 10Y - 2Y, 0.10%, 07/15/26, <sup>Footnote Reference(1)</sup> | 2.5% |
| Purchased Option - CMS 10Y - 2Y, 0.20%, 04/14/27, <sup>Footnote Reference(1)</sup> | 2.4% |
| Purchased Option - CMS 10Y - 2Y, 0.03%, 01/28/26, <sup>Footnote Reference(1)</sup> | 1.9% |
| Purchased Option - CMS 10Y - 2Y, 0.28%, 12/09/26, <sup>Footnote Reference(1)</sup> | 1.4% |
| Purchased Option - CMS 10Y - 2Y, 0.08%, 09/17/25, <sup>Footnote Reference(1)</sup> | 0.9% |
| Purchased Option - CMS 10Y - 2Y, 0.13%, 06/25/25, <sup>Footnote Reference(1)</sup> | 0.5% |

---

---

| | |
|:---|:---|
| Footnote | Description |
| &nbsp;&nbsp;Footnote<sup>(1)</sup> | &nbsp;&nbsp;At market value. |

---

## Material Fund Changes
There were no material changes during the reporting period.

## Changes in and Disagreements with Accountants
There were no changes in or disagreements with accountants during the reporting period.

## Additional Information
For additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information, visit https://kfafunds.com/ivol/.

![An image of a QR code that, when scanned, navigates the user to the following URL: https://confluence.com](i78e8c917b1aa2ec1a3dea4e4.jpg)

## Householding
You may have consented to receive one copy of a shareholder report at your address if you and one or more individuals in your home have multiple accounts at the same address. This practice is commonly called "householding" and is intended to reduce expenses. If you wish to change your householding status or receive individual copies of your shareholder report, please contact us at 1-833-IVOL-ETF (1-833-486-5383) or your financial intermediary.

#### KraneShares Trust

#### Quadratic Interest Rate Volatility and Inflation Hedge ETF: IVOL

#### Principal Listing Exchange: NYSE Arca

#### Annual Shareholder Report: March 31, 2025

#### IVOL-AR-2025
![Image](i7ce345e970cf6093eb33245e.jpg)

![Image](ief9396626e19585199774660.jpg)

## KraneShares Trust
![Image](i7ce345e970cf6093eb33245e.jpg)

![Image](i89f7d524e589e2be0a30d431.jpg)

# Quadratic Deflation ETF

## Ticker: BNDD

#### Principal Listing Exchange: NYSE Arca

## Annual Shareholder Report: March 31, 2025
This annual shareholder report contains important information about the Quadratic Deflation ETF (the "Fund") for the period from April 1, 2024 to March 31, 2025. You can find additional information about the Fund at https://kfafunds.com/bndd/. You can also request this information by contacting us at 1-888-BNDD-007 (1-888-263-3007).

## What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)

---

| | | |
|:---|:---|:---|
| **<u>Fund Name</u>** | **<u>Costs of a $10,000 investment</u>** | **<u>Costs paid as a percentage of a $10,000 investment</u>** |
| Quadratic Deflation ETF | $96 | 1.00% |

---

## How did the Fund perform in the last year?
During the Funds' fiscal year ended March 31, 2025 ("the period"), the macro environment was challenging. At the beginning of 2024, 150 bps of Fed cuts were priced in, but the Fed ultimately delivered only 100 bps of cuts. Major central banks across the world tried to balance the risk of persistently high inflation with the risk of keeping interest rates too high and pushing economies into recession. As the year passed, investors grew less concerned with inflation and more concerned about a potential recession. There remains a persistent concern with the high U.S. Federal deficit and its impact on the government's overall debt servicing costs.

More recently in 2025, the headlines have been focused on the new administration as it imposes new tariffs and negotiates trade deals with other countries. It is still unclear how this process will play out and how it will impact the economy. A significant amount of uncertainty remains, and markets are likely still not pricing in the vast array of outcomes.

BNDD is a fixed income ETF that seeks to benefit from lower growth, deflation, lower or negative long-term interest rates, and/or a reduction in the spread between shorter and longer term interest rates by investing in U.S. Treasuries and options.

BNDD significantly underperformed an index composed entirely of long-dated Treasury bonds during the period. (Please note that this passive bond index is provided for comparative purposes only, as the fund's strategy is benchmark agnostic.) This was largely due to BNDD's options exposure, which lost value as front-end rates declined and long-end rates rose. BNDD owns options related to the spread between shorter and longer term interest rates. Its options are designed to increase in value in times of lower growth, deflation, and lower or negative long-term interest rates. During the period, the options owned by BNDD decreased in value. It was this dynamic which caused it to underperform a portfolio of only long-dated Treasuries.

#### How did the Fund perform since inception?

## Total Return Based on $10,000 Investment
![Growth Chart](i8ffdd256da2d5d3a6e6a777f.jpg)

---

| | | |
|:---|:---|:---|
| | **Quadratic Deflation ETF - $8430** | **Bloomberg Long U.S. Treasury Index - $7055** |
| **Sep/21** | $10000 | $10000 |
| **Mar/22** | $10497 | $8832 |
| **Mar/23** | $9229 | $7419 |
| **Mar/24** | $9130 | $6967 |
| **Mar/25** | $8430 | $7055 |

---

## Average Annual Total Returns as of March 31, 2025

---

| | | |
|:---|:---|:---|
| **<u>Fund/Index Name</u>** | **<u>1 Year</u>** |  **<u>Since Inception</u>** |
| Quadratic Deflation ETF | -7.66% | -4.72% |
| Bloomberg Long U.S. Treasury Index | 1.26% | -9.41% |

---

The line graph represents historical performance of a hypothetical investment of $10,000 in the Fund since its inception on September 20, 2021. Returns shown are total returns, which assume the reinvestment of dividends and capital gains. The table and graph presented above do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. **Past performance is not indicative of future performance.**Call 1-888-BNDD-007 (1-888-263-3007) or visit https://kfafunds.com/bndd/ for current month-end performance.

## Key Fund Statistics as of March 31, 2025

---

| | | |
|:---|:---|:---|
| **Total Net Assets** | **Total Advisory Fees Paid** | **Portfolio Turnover Rate** |
| $10362952<sub>3</sub> | $196661 | 0% |

---

#### What did the Fund invest in?

#### Asset Weightings<sup>Footnote Reference \*</sup><sup>Footnote Reference ^</sup>
![Group By Sector Chart](i4be95ce536fba9b03aed631b.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| Purchased Options<sup>Footnote Reference(1)</sup> | 4.3% |
| Exchange Traded Funds | 83.1% |

---

---

| | |
|:---|:---|
| Footnote | Description |
| &nbsp;&nbsp;Footnote<sup>\*</sup> | &nbsp;&nbsp;Percentages are calculated based on total net assets. |
| &nbsp;&nbsp;Footnote<sup>^</sup> | &nbsp;&nbsp;Investments as a percentage of total net assets will not add up to 100% because this chart does not include cash and other assets and liabilities. The difference between 100% and the sum of the percentages above is mostly cash held by the fund. |
| &nbsp;&nbsp;Footnote<sup>(1)</sup> | &nbsp;&nbsp;At market value. |

---

### Top Holdings

---

| | |
|:---|:---|
| **<u>Holding Name</u>** | **<u>Percentage of Total Net Assets</u>** |
| Vanguard Long-Term Treasury ETF | 83.1% |
| Purchased Option - CMS 30Y – 2Y, 0.25%, 08/12/26, <sup>Footnote Reference(1)</sup> | 2.2% |
| Purchased Option - CMS 30Y – 2Y, 0.33%, 09/24/25, <sup>Footnote Reference(1)</sup> | 2.1% |

---

---

| | |
|:---|:---|
| Footnote | Description |
| &nbsp;&nbsp;Footnote<sup>(1)</sup> | &nbsp;&nbsp;At market value. |

---

## Material Fund Changes
There were no material changes during the reporting period.

## Changes in and Disagreements with Accountants
There were no changes in or disagreements with accountants during the reporting period.

## Additional Information
For additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information, visit https://kfafunds.com/bndd/.

![An image of a QR code that, when scanned, navigates the user to the following URL: https://confluence.com](i78e8c917b1aa2ec1a3dea4e4.jpg)

## Householding
You may have consented to receive one copy of a shareholder report at your address if you and one or more individuals in your home have multiple accounts at the same address. This practice is commonly called "householding" and is intended to reduce expenses. If you wish to change your householding status or receive individual copies of your shareholder report, please contact us at 1-888-BNDD-007 (1-888-236-3007) or your financial intermediary.

#### KraneShares Trust

#### Quadratic Deflation ETF: BNDD

#### Principal Listing Exchange: NYSE Arca

#### Annual Shareholder Report: March 31, 2025

#### BNDD-AR-2025
![Image](i7ce345e970cf6093eb33245e.jpg)

![Image](i89f7d524e589e2be0a30d431.jpg)

(b) Not applicable to the Registrant.

**Item 2. Code of Ethics.**

The Registrant has adopted a code of ethics that applies to the Registrant's principal executive officer, principal financial officer, and any person who performs a similar function. During the period covered by the report, there were no amendments to the code of ethics, and the Registrant did not grant any waivers from a provision of the code of ethics.

**Item 3. Audit Committee Financial Expert.**

(a)(1) The Registrant's Board of Trustees has determined that the Registrant has an audit committee financial expert serving on the audit committee.

(a)(2) The audit committee financial expert, John Ferguson, is an independent trustee as defined in Form N-CSR Item 3 (a)(2).

**Item 4. Principal Accountant Fees and Services.**

Fees billed by KPMG LLP ("KPMG") related to the Registrant.

KPMG billed the Registrant aggregate fees for services rendered to the Registrant for the last two fiscal years as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
| | | **All fees and services to the Registrant that were pre-approved** | **All fees and services to service affiliates that were pre-approved** | **All other fees and services to service affiliates that did not require pre-approval** | **All fees and services to the Registrant that were pre-approved** | **All fees and services to service affiliates that were pre-approved** | **All other fees and services to service affiliates that did not require pre-approval** |
| (a) | Audit Fees | $662000 | $0 | N/A | $587250 | $0 | N/A |
| (b) | Audit-Related Fees | $7500 | $0 | N/A | $0 | $0 | N/A |
| (c) | Tax Fees<sup>(1)</sup> | $172195 | $0 | N/A | $178000 | $0 | N/A |
| (d) | All Other Fees | $4076 | $0 | N/A | $9000 | $0 | N/A |

---

Notes:

(1) These services included tax return preparation and tax compliance for the Funds.

(e)(1) Pursuant to the requirements of the Sarbanes-Oxley Act of 2002, the SEC adopted Rule 2-01 under Regulation S-X, which, among other things, requires a fund's audit committee to pre-approve certain audit and non-audit services that are provided by its independent auditors in order to ensure the auditors' independence. The Registrant's Board of Trustees has established an Audit Committee that has been charged with, among other things, assisting the Board of Trustees in its oversight of: the Registrant's independent auditors; preapproving all audit and non-audit services provided by the Registrant's independent auditors; the integrity of the Funds' financial statements; the independent auditors' qualifications and independence; and the use of appropriate accounting principles.

(e)(2) Percentage of fees billed applicable to non-audit services approved pursuant to the "de minimis" exception of Rule 2-01(c)(7)(i)(C) were as follows for KPMG:

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| Audit-Related Fees | 0% | 0% |
| Tax Fees | 0% | 0% |
| All Other Fees | 0% | 0% |

---

(f) Not applicable.

(g) The aggregate non-audit fees and services billed by KPMG for the last two fiscal years were $0 and $0, respectively.

(h) During the past fiscal year, all non-audit services provided by the Registrant's principal accountant to either the Registrant's investment adviser or to entities controlling, controlled by, or under common control with the Registrant's investment adviser that provides ongoing services to the Registrant were pre-approved by the Audit Committee of the Registrant's Board of Trustees. Included in the audit committee's pre-approval was the review and consideration as to whether the provision of these non-audit services is compatible with maintaining the principal accountant's independence.

(i) Not applicable. The Registrant has not retained, for the preparation of the audit report on the financial statements included in the Form N-CSR, a registered public accounting firm that has a branch or office that is located in a foreign jurisdiction and that the Public Company Accounting Oversight Board (the "PCAOB") has determined that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction.

(j) Not applicable. The Registrant is not a "foreign issuer," as defined in 17 CFR 240.3b-4.

**Item 5. Audit Committee of Listed Registrants.**

(a) The Registrant has a separately-designated standing Audit Committee, which is composed of the Registrant's Independent Trustees, Messrs. Luis Berruga, John Ferguson and Matthew Stroyman.

(b) Not applicable to the Registrant.

**Item 6.** **Investments.**

(a) The Schedules of Investments and Consolidated Schedules of Investments are included as part of the Registrant's Financial Statements and Other Information filed under Item 7 of this form.

(b) Not applicable to the Registrant.

**Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.**

**Financial statements and financial highlights are filed herein.**

![](img_001.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Annual Financials and Other Information**<br>**Quadratic Interest Rate Volatility and Inflation Hedge ETF**<br> **Quadratic Deflation ETF**<br>***March 31, 2025***<br>

**Table of Contents**

---

| | |
|:---|:---|
| Financial Statements (Form N-CSR Item 7) |  |
| &nbsp;&nbsp;&nbsp;[Schedules of Investments](#a_002) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Quadratic Interest Rate Volatility and Inflation Hedge ETF](#a_003) | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Quadratic Deflation ETF](#a_004) | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Glossary](#a_005) | 3 |
| &nbsp;&nbsp;&nbsp;[Statements of Assets and Liabilities](#a_006) | 4 |
| &nbsp;&nbsp;&nbsp;[Statements of Operations](#a_007) | 5 |
| &nbsp;&nbsp;&nbsp;[Statements of Changes in Net Assets](#a_008) | 6 |
| &nbsp;&nbsp;&nbsp;[Financial Highlights](#a_009) | 8 |
| &nbsp;&nbsp;&nbsp;[Notes to Financial Statements](#a_010) | 10 |
| &nbsp;&nbsp;&nbsp;[Report of Independent Registered Public Accounting Firm](#a_011) | 28 |
| [Notice To Shareholders (Unaudited)](#a_012) | 30 |
| [Other Information (Form N-CSR Items 8-11) (Unaudited)](#a_013) | 31 |

---

**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.**

**Schedule of Investments** *March 31, 2025*

**Quadratic Interest Rate Volatility and Inflation Hedge ETF**

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Value** |
| **EXCHANGE-TRADED FUND — 79.8%** |  |  |
| &nbsp;&nbsp;&nbsp;Schwab US TIPS ETF<sup>(A)</sup> | 14175424 | $381177152 |
| TOTAL EXCHANGE-TRADED FUND<br> (Cost $439,996,394) |  | 381177152 |
| **PURCHASED OPTIONS<sup>(B)</sup> — 13.7%** |  |  |
| TOTAL PURCHASED OPTIONS<br> (Cost $89,193,750) |  | 65446378 |
| TOTAL INVESTMENTS — 93.5%<br> (Cost $529,190,144) |  | 446623530 |
| OTHER ASSETS LESS LIABILITIES – 6.5% |  | 31159791 |
| NET ASSETS - 100% |  | $477783321 |

---

*(A)* *For financial information on the Schwab US TIPS ETF, please go to the Commission's website at http:// www.sec.gov.* 

*(B)* *Refer to option table below.* 

A list of open option contracts held by the Fund as of March 31, 2025 was as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Description** | **Counterparty** | **Number of<br> Contracts^** | **Notional<br> Amount<sup>†</sup>** | **Exercise<br> Price** | **Expiration<br> Date** | **Market<br> Value** |
| **PURCHASED OPTIONS — 13.7%** | **PURCHASED OPTIONS — 13.7%** |  |  |  |  |  |
| **Call Options** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;CMS 10Y - 2Y | Nomura | 500000 | $23750000 | 0.05% | 04/08/26 | $19482906 |
| &nbsp;&nbsp;&nbsp;CMS 10Y - 2Y | Morgan Stanley | 300000 | 13837500 | 0.10 | 07/15/26 | 11780593 |
| &nbsp;&nbsp;&nbsp;CMS 10Y - 2Y | Goldman Sachs | 300000 | 14250000 | 0.20 | 04/14/27 | 11572454 |
| &nbsp;&nbsp;&nbsp;CMS 10Y - 2Y | Morgan Stanley | 250000 | 10937500 | 0.03 | 01/28/26 | 9309305 |
| &nbsp;&nbsp;&nbsp;CMS 10Y - 2Y | Morgan Stanley | 200000 | 9500000 | 0.28 | 12/09/26 | 6535476 |
| &nbsp;&nbsp;&nbsp;CMS 10Y - 2Y | Goldman Sachs | 175000 | 9318750 | 0.08 | 09/17/25 | 4299674 |
| &nbsp;&nbsp;&nbsp;CMS 10Y - 2Y | Nomura | 200000 | 7600000 | 0.13 | 06/25/25 | 2465970 |
| &nbsp;&nbsp;&nbsp;Total Purchased Options |  |  | $89193750 |  |  | $65446378 |

---

*†* *Represents cost.* <br> *^* *Value equals 10,000 x Number of Contracts x Market Price*

The following summarizes the market value of the Fund's investments and other financial instruments used as of March 31, 2025, based on the inputs used to value them:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Investments in Securities** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| &nbsp;&nbsp;&nbsp;Exchange-Traded Fund | $381177152 | $— | $— | $381177152 |
| &nbsp;&nbsp;&nbsp;Purchased Options |  | 65446378 |  | 65446378 |
| Total Investments in Securities | $381177152 | $65446378 | $— | $446623530 |

---

*Amounts designated as "—" are $0.*

*See "Glossary" for abbreviations.*

*The accompanying notes are an integral part of the financial statements.*

**Schedule of Investments** *March 31, 2025*

**Quadratic Deflation ETF**

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Value** |
| **EXCHANGE-TRADED FUND — 83.1%** |  |  |
| &nbsp;&nbsp;&nbsp;Vanguard Long-Term Treasury ETF<sup>(A)</sup> | 149465 | $8610679 |
| TOTAL EXCHANGE-TRADED FUND<br> (Cost $13,472,362) |  | 8610679 |
| **PURCHASED OPTIONS<sup>(B)</sup> — 4.3%** |  |  |
| TOTAL PURCHASED OPTIONS<br> (Cost $637,000) |  | 441966 |
| TOTAL INVESTMENTS — 87.4%<br> (Cost $14,109,362) |  | 9052645 |
| OTHER ASSETS LESS LIABILITIES – 12.6% |  | 1310307 |
| NET ASSETS - 100% |  | $10362952 |

---

*(A)* *For financial information on the Vanguard Long-Term Treasury ETF, please go to the Commission's website at http://www.sec.gov.* 

*(B)* *Refer to option table below.* 

A list of open option contracts held by the Fund as of March 31, 2025 was as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **<br>Description** | **Counterparty** | **Number of<br> Contracts^** | **Notional<br> Amount<sup>†</sup>** | **Exercise<br> Price** | **Expiration<br> Date** | **Market<br> Value** |
| **PURCHASED OPTIONS — 4.3%** | **PURCHASED OPTIONS — 4.3%** |  |  |  |  |  |
| **Put Options** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;CMS 30Y - 2Y | Nomura | 8000 | $340000 | 0.25% | 08/12/26 | $228661 |
| &nbsp;&nbsp;&nbsp;CMS 30Y - 2Y | Goldman Sachs | 9000 | 297000 | 0.33 | 09/24/25 | 213305 |
| &nbsp;&nbsp;&nbsp;Total Purchased Options |  |  | $637000 |  |  | $441966 |

---

*†* *Represents cost.* <br> *^* *Value equals 10,000 x Number of Contracts x Market Price*

The following summarizes the market value of the Fund's investments used as of March 31, 2025, based on the inputs used to value them:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Investments in Securities** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| &nbsp;&nbsp;&nbsp;Exchange-Traded Fund | $8610679 | $— | $— | $8610679 |
| &nbsp;&nbsp;&nbsp;Purchased Options |  | 441966 |  | 441966 |
| Total Investments in Securities | $8610679 | $441966 | $— | $9052645 |

---

*Amounts designated as "—" are $0.*

*See "Glossary" for abbreviations.*

*The accompanying notes are an integral part of the financial statements.*

**Schedule of Investments** *March 31, 2025*

**Glossary (abbreviations used in preceding Schedule of Investments):**

**Fund Abbreviations**

CMS — Constant Maturity Swap

ETF — Exchange-Traded Fund

**Statements of Assets and Liabilities**

*March 31, 2025*

---

| | | |
|:---|:---|:---|
|  | **Quadratic Interest Rate<br> Volatility and Inflation<br> Hedge ETF** | **Quadratic<br> Deflation ETF** |
| **Assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Investments at Value | $446623530 | $9052645 |
| &nbsp;&nbsp;&nbsp;Cash and Cash Equivalents | 31459831 | 1314921 |
| &nbsp;&nbsp;&nbsp;Dividend and Interest Receivable | 88223 | 4253 |
| &nbsp;&nbsp;&nbsp;**Total Assets** | 478171584 | 10371819 |
| **Liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Payable for Management Fees | 383854 | 8765 |
| &nbsp;&nbsp;&nbsp;Payable for Trustees' Fees | 4409 | 102 |
| &nbsp;&nbsp;&nbsp;**Total Liabilities** | 388263 | 8867 |
| &nbsp;&nbsp;&nbsp;**Net Assets** | $477783321 | $10362952 |
| **Net Assets Consist of:** |  |  |
| &nbsp;&nbsp;&nbsp;Paid-in Capital | $606987080 | $19235887 |
| &nbsp;&nbsp;&nbsp;Total Distributable Loss | (129203759) | (8872935) |
| &nbsp;&nbsp;&nbsp;**Net Assets** | $477783321 | $10362952 |
| &nbsp;&nbsp;&nbsp;Outstanding Shares of Beneficial Interest (unlimited authorization - no par value) | 25600002 | 775002 |
| &nbsp;&nbsp;&nbsp;Net Asset Value, Offering and Redemption Price Per Share | $18.66 | $13.37 |
| &nbsp;&nbsp;&nbsp;Cost of Investments | $529190144 | $14109362 |

---

*The accompanying notes are an integral part of the financial statements.*

**Statements of Operations**

*For the year ended March 31, 2025*

---

| | | |
|:---|:---|:---|
|  | **Quadratic Interest Rate<br> Volatility and Inflation<br> Hedge ETF** | **Quadratic<br> Deflation ETF** |
| **Investment Income:** |  |  |
| &nbsp;&nbsp;&nbsp;Dividend Income | $15627625 | $654219 |
| &nbsp;&nbsp;&nbsp;Interest Income | 1993511 | 138118 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Investment Income** | 17621136 | 792337 |
| **Expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;Management Fees<sup>†</sup> | 6028220 | 196661 |
| &nbsp;&nbsp;&nbsp;Trustees' Fees | 63996 | 2172 |
| &nbsp;&nbsp;&nbsp;Insurance Expense | 13267 | 557 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Expenses** | 6105483 | 199390 |
| &nbsp;&nbsp;&nbsp;**Net Investment Income** | 11515653 | 592947 |
| **Net Realized Gain (Loss) on:** |  |  |
| &nbsp;&nbsp;&nbsp;Investments | (32473220) | (7544918) |
| &nbsp;&nbsp;&nbsp;Purchased Options | (102037500) | (1414500) |
| &nbsp;&nbsp;&nbsp;**Net Realized Loss** | (134510720) | (8959418) |
| **Net Change in Unrealized Appreciation (Depreciation) on:** |  |  |
| &nbsp;&nbsp;&nbsp;Investments | 44498145 | 6977704 |
| &nbsp;&nbsp;&nbsp;Purchased Options | 81514410 | (96254) |
| &nbsp;&nbsp;&nbsp;**Net Change in Unrealized Appreciation (Depreciation)** | 126012555 | 6881450 |
| &nbsp;&nbsp;&nbsp;**Net Realized and Unrealized Loss** | (8498165) | (2077968) |
| &nbsp;&nbsp;&nbsp;**Net Increase (Decrease) in Net Assets Resulting from Operations** | $3017488 | $(1485021) |

---

*†* *See Note 4 in Notes to Financial Statements.* 

*The accompanying notes are an integral part of the financial statements.*

**Statements of Changes in Net Assets**

---

| | | |
|:---|:---|:---|
|  | **Quadratic Interest Rate**<br> **Volatility and Inflation<br> Hedge ETF** | **Quadratic Interest Rate**<br> **Volatility and Inflation<br> Hedge ETF** |
|  | **Year Ended<br> March 31,<br> 2025** | **Year Ended<br> March 31,<br> 2024** |
| **Operations:** |  |  |
| &nbsp;&nbsp;&nbsp;Net Investment Income | $11515653 | $14962477 |
| &nbsp;&nbsp;&nbsp;Net Realized Loss | (134510720) | (120012569) |
| &nbsp;&nbsp;&nbsp;Net Change in Unrealized Appreciation (Depreciation) | 126012555 | (8651317) |
| &nbsp;&nbsp;&nbsp;**Net Increase (Decrease) in Net Assets Resulting from Operations** | 3017488 | (113701409) |
| **Return of Capital** | (21677257) | (31848020) |
| **Capital Share Transactions:<sup>(1)</sup>** |  |  |
| &nbsp;&nbsp;&nbsp;Issued | 169670962 | 449171784 |
| &nbsp;&nbsp;&nbsp;Redeemed | (463726513) | (299178909) |
| &nbsp;&nbsp;&nbsp;**Increase (Decrease) in Net Assets from Capital Share Transactions** | (294055551) | 149992875 |
| &nbsp;&nbsp;&nbsp;**Total Increase (Decrease) in Net Assets** | (312715320) | 4443446 |
| **Net Assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Beginning of Year | 790498641 | 786055195 |
| &nbsp;&nbsp;&nbsp;End of Year | $477783321 | $790498641 |
| **Share Transactions:** |  |  |
| &nbsp;&nbsp;&nbsp;Issued | 9050000 | 21650000 |
| &nbsp;&nbsp;&nbsp;Redeemed | (25150000) | (14625000) |
| &nbsp;&nbsp;&nbsp;**Net Increase (Decrease) in Shares Outstanding from Share Transactions** | (16100000) | 7025000 |

---

*(1)* *Includes transaction costs related to creations and redemptions.* 

*Amounts designated as "—" are $0.*

*The accompanying notes are an integral part of the financial statements.*

**Statements of Changes in Net Assets (concluded)**

---

| | | |
|:---|:---|:---|
|  | **Quadratic<br> Deflation ETF** | **Quadratic<br> Deflation ETF** |
|  | **Year Ended<br> March 31,<br> 2025** | **Year Ended<br> March 31,<br> 2024** |
| **Operations:** |  |  |
| &nbsp;&nbsp;&nbsp;Net Investment Income | $592947 | $1452627 |
| &nbsp;&nbsp;&nbsp;Net Realized Loss | (8959418) | (3072957) |
| &nbsp;&nbsp;&nbsp;Net Change in Unrealized Appreciation (Depreciation) | 6881450 | (1639460) |
| &nbsp;&nbsp;&nbsp;**Net Decrease in Net Assets Resulting from Operations** | (1485021) | (3259790) |
| **Distributions:** |  | (2094154) |
| **Return of Capital** | (692544) | (271781) |
| **Capital Share Transactions:<sup>(1)</sup>** |  |  |
| &nbsp;&nbsp;&nbsp;Issued | 2833280 | 109412230 |
| &nbsp;&nbsp;&nbsp;Redeemed | (20308806) | (162408103) |
| &nbsp;&nbsp;&nbsp;**Decrease in Net Assets from Capital Share Transactions** | (17475526) | (52995873) |
| &nbsp;&nbsp;&nbsp;**Total Decrease in Net Assets** | (19653091) | (58621598) |
| **Net Assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Beginning of Year | 30016043 | 88637641 |
| &nbsp;&nbsp;&nbsp;End of Year | $10362952 | $30016043 |
| **Share Transactions:** |  |  |
| &nbsp;&nbsp;&nbsp;Issued | 200000 | 7125000 |
| &nbsp;&nbsp;&nbsp;Redeemed | (1425000) | (10725000) |
| &nbsp;&nbsp;&nbsp;**Net Decrease in Shares Outstanding from Share Transactions** | (1225000) | (3600000) |

---

*(1)* *Includes transaction costs related to creations and redemptions.* 

*Amounts designated as "—" are $0.*

*The accompanying notes are an integral part of the financial statements.*

**Financial Highlights**

*Selected Per Share Data & Ratios*

*For the Years/Periods Ended March 31*

*For a Share Outstanding Throughout Each Period*

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset Value,<br> Beginning of Year<br> ($)** | **Net Investment<br> Income (Loss)<br> ($)\*** | **Net Realized <br> and Unrealized <br> Gain (Loss) on <br> Investments<br> ($)** | **Total from<br> Operations<br> ($)** | **Distribution from<br> Net Investment<br> Income<br> ($)** | **Return of<br> Capital<br> ($)** |
| **Quadratic Interest Rate Volatility and Inflation Hedge ETF** | **Quadratic Interest Rate Volatility and Inflation Hedge ETF** | **Quadratic Interest Rate Volatility and Inflation Hedge ETF** |  |  |  |  |
| 2025 | 18.96 | 0.35 | 0.02 | 0.37 |  | (0.67) |
| 2024 | 22.67 | 0.36 | (3.32) | (2.96) |  | (0.75) |
| 2023 | 25.53 | 1.15 | (3.16) | (2.01) |  | (0.85) |
| 2022 | 28.47 | 0.93 | (2.84) | (1.91) | (0.82) | (0.21) |
| 2021 | 25.97 | (0.02) | 3.51 | 3.49 | (0.90) | (0.09) |
| **Quadratic Deflation ETF** |  |  |  |  |  |  |
| 2025 | 15.01 | 0.43 | (1.56) | (1.13) |  | (0.51) |
| 2024 | 15.83 | 0.37 | (0.55) | (0.18) | (0.57) | (0.07) |
| 2023 | 25.74 | 0.29 | (3.79) | (3.50) | (6.41) |  |
| 2022<sup>(1)</sup> | 25.00 | 0.03 | 1.21<sup>(2)</sup> | 1.24 | (0.50) |  |

---

---

| | |
|:---|:---|
| *\** | *Per share data calculated using average shares method.* |
| *\*\** | *Total return is based on the change in net asset value of a share during the year or period and assumes reinvestment of dividends and distributions at net asset value. Total return is for the period indicated and periods of less than one year have not been annualized. The return shown does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Excludes effects of standard creation and redemption transaction fees associated with creation units.* |
| *~* | *During the periods, certain fees were waived. (See Note 3 in the Notes to Financial Statements).* |
| *†* | *Annualized.* |
| *††* | *Portfolio turnover rate is for the period indicated and periods of less than one year have not been annualized. Excludes effect of in-kind transfers.* |
| *‡* | *The ratios of expenses and net investment income/(loss) to Average Net Assets reflect the expenses and net investment income/(loss), respectively, for the year/period as reported in the Statements of Operations and do not reflect the Fund's proportionate share of the income and expenses from investments in other investment companies.* |
| *(1)* | *The Fund's inception date was on September 20, 2021.* |
| *(2)* | *Realized and unrealized gains and losses per share are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the period.* |

---

*Amounts designated as "—" are $0 or have been rounded to $0.*

*The accompanying notes are an integral part of the financial statements.*

---

| | | | |
|:---|:---|:---|:---|
| **Total from<br> Distributions<br> ($)** | **Net Asset Value, <br> End of Year<br> ($)** | **Total Return<br> (%)\*\*** | **Net Assets,<br> End of Year<br> ($)(000)** |
| (0.67) | 18.66 | 2.03 | 4777831.00<sup>‡</sup>1.89<sup>‡</sup> – |
| (0.75) | 18.96 | (13.30) | 7904991.00<sup>‡</sup>1.71<sup>‡</sup> – |
| (0.85) | 22.67 | (7.95) | 7860551.00<sup>‡</sup>4.82<sup>‡</sup> – |
| (1.03) | 25.53 | (6.88) | 17375420.98<sup>‡</sup>0.99<sup>‡</sup>3.38<sup>‡</sup> – |
| (0.99) | 28.47 | 13.65 | 26298580.94<sup>‡</sup>0.99<sup>‡</sup>(0.06)<sup>‡</sup> – |
| (0.51) | 13.37 | (7.66) | 103631.00<sup>‡</sup>2.98<sup>‡</sup> – |
| (0.64) | 15.01 | (1.08) | 300160.98<sup>‡</sup>1.00<sup>‡</sup>2.48<sup>‡</sup> – |
| (6.41) | 15.83 | (12.08) | 886380.95<sup>‡</sup>1.00<sup>‡</sup>1.37<sup>‡</sup> – |
| (0.50) | 25.74 | 4.97 | 1389940.94<sup>†‡</sup>0.99<sup>†‡</sup>0.24<sup>†‡</sup> – <sup>††</sup> |

---

*The accompanying notes are an integral part of the financial statements.*

**Notes to Financial Statements**

**1. ORGANIZATION**

KraneShares Trust (the "Trust") is a Delaware Statutory Trust formed on February 3, 2012. The Trust is registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"), as an open-end management investment company. As of March 31, 2025, the Trust had 32 operational series. The financial statements herein and the related notes pertain to the Quadratic Interest Rate Volatility and Inflation Hedge ETF and the Quadratic Deflation ETF, (each, a "Fund" and collectively, the "Funds"). The Funds are non-diversified Funds, as defined under Section 5(b)(1) of the Investment Company Act. Krane Funds Advisors, LLC ("Krane" or the ''Adviser''), a Delaware limited liability company, serves as the investment adviser for the Funds and is subject to the supervision of the Board of Trustees (the ''Board''). Quadratic Capital Management LLC ("Quadratic" or "Sub-Adviser") serves as the sub-adviser to the Funds and is responsible for the day-to-day management of the Funds.

China International Capital Corporation (USA) Holdings Inc., a wholly-owned, indirect subsidiary of China International Capital Corporation Limited owns a majority stake in Krane. As of March 31, 2025, Central Huijin Investment Limited, a mainland Chinese-domiciled entity, and HKSCC Nominees Limited, held approximately 40.1% and 39.4%, respectively, of the shares of China International Capital Corporation Limited. Central Huijin Investment Limited is a wholly-owned subsidiary of China Investment Corporation, which is a mainland Chinese sovereign wealth fund. KFA One Holdings, LLC, located at 280 Park Avenue 32nd Floor, New York, New York, 10017, holds the remaining equity interests in Krane and Jonathan Krane, through his equity interests in KFA One Holdings, LLC, beneficially owns more than 10% of the equity interests in Krane.

Shares of the Funds are listed and traded on the NYSE Arca, Inc. (the "Exchange" or the "NYSE"). Market prices for Fund shares ("Shares") may be different from their net asset value ("NAV"). The Funds issue and redeem Shares on a continuous basis at NAV only in large blocks of Shares each called a "Creation Unit". This does not mean, however, that individual investors will be able to redeem and purchase Shares directly with the series of the Trust. Only Authorized Participants can redeem and purchase Creation Units of Shares directly. Each Fund will issue and redeem Shares for a basket of securities and/or a balancing cash amount. Individual shares trade in the secondary market at market prices that change throughout the day.

As of March 31, 2025, all shares issued by the Funds were in Creation Units to Authorized Participants through primary market transactions (e.g., transactions directly with the Funds). However, the individual shares that make up those Creation Units are traded on the Exchange (i.e., secondary market transactions). Some of those individual shares have been bought and sold by persons that are not Authorized Participants. Each Authorized Participant has entered into an agreement with the Funds' Distributor.

The Quadratic Interest Rate Volatility and Inflation Hedge ETF is a fixed income ETF that seeks to hedge relative interest rate movements, whether these movements arise from falling short-term interest rates or rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, while providing the potential for enhanced inflation-protected income. The Fund is actively managed and does not track an index. The Fund's investment in the Schwab US TIPS ETF represents greater than 75% of the Fund's total investments. For further financial information, available upon request, on the Schwab US TIPS ETF, please go to the Commission's website at https://www.sec.gov.

**Notes to Financial Statements (continued)**

The Quadratic Deflation ETF is a fixed income ETF that seeks to benefit from lower growth, deflation, lower or negative long-term interest rates, and/or a reduction in the spread between shorter and longer term interest rates by investing in US Treasuries and options. The Fund is actively managed and does not track an index. The Fund's investment in the Vanguard Long-Term Treasury ETF represents greater than 75% of the Fund's total investments. For further financial information, available upon request, on the Vanguard Long-Term Treasury ETF, please go to the Commission's website at https://www.sec.gov.

**2. SIGNIFICANT ACCOUNTING POLICIES**

The following is a summary of the significant accounting policies followed by the Funds. The Funds are investment companies that apply the accounting and reporting guidance issued in Topic 946 by the U.S. Financial Accounting Standards Board ("FASB").

USE OF ESTIMATES — The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates, and could have a material impact to the Funds.

SECURITY VALUATION — The NAV per share of each Fund is computed by dividing the value of the net assets of a Fund (i.e., the value of its total assets less total liabilities and withholdings) by the total number of shares of a Fund outstanding, rounded to the nearest cent. Expenses and fees, including without limitation, the management, administration and distribution fees, are accrued daily and taken into account for purposes of determining NAV. The NAV per share for each Fund normally is calculated by the Administrator (as defined below) and determined as of the regularly scheduled close of the normal trading on each day that the NYSE is scheduled to be open for business (normally 4:00 p.m., Eastern Time). Any assets or liabilities denominated in currencies other than the U.S. dollar are converted into U.S. dollars at the current market rates on the date of valuation as quoted by one or more sources.

Securities listed on a securities exchange (i.e. exchange-traded equity securities), market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued by independent pricing agents at the last reported sale price on the primary exchange or market (foreign or domestic) on which they are traded (or at the time as of which the Fund's NAV is calculated if a security's exchange is normally open at that time). If there is no such reported sale, such securities are valued at the most recently reported bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. If a security price cannot be obtained from an independent, third-party pricing agent, the Fund seeks to obtain bid and ask prices from two broker-dealers who make a market in the portfolio instrument and determines the average of the two.

If available, debt securities are priced based upon valuations provided by independent third-party pricing agents. Such values generally reflect the last reported sales price if the security is actively traded. The third-party pricing agents may also value debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, or other methodologies designed to identify the market value for such securities. Debt obligations with remaining maturities of sixty days or less may be valued at their amortized cost, which approximates market value.

**Notes to Financial Statements (continued)**

The prices for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates. The exchange rates used for valuation are captured as of the close of the London Stock Exchange each day normally at 4:00 p.m. Greenwich Mean Time.

The value of a swap contract is equal to the obligation (or rights) under the swap contract, which will generally be equal to the net amounts to be paid or received under the contract based upon the relative values of the positions held by each party to the contract as determined by the applicable independent, third party pricing agent.

Swaps cleared through a central clearing house ("centrally cleared swaps") are valued at the settlement price established each day by the board of the exchange on which they are listed. The daily settlement prices for centrally cleared swaps are provided by an Independent Pricing Agent. Swaps which are not centrally cleared are priced based on valuations provided by an Independent Pricing Agent.

Exchange-traded options, except as discussed below for FLEX options, are valued at the mean of their most recent bid and asked price, if available, and otherwise, long positions will be valued at the most-recent bid price, and short positions will be valued at the most-recent ask price. Over-the-counter ("OTC") options are valued based upon prices determined by the applicable independent, third party pricing agent. FLEX (short for flexible) options are normally valued using a model-based price provided by a third-party pricing vendor. On days when a trade in a FLEX option occurs, the trade price will be used to value such FLEX options in lieu of the model price.

Futures are valued at the settlement price established by the board of trade on which they are traded. Foreign currency forward contracts are valued at the current day's interpolated foreign exchange rate, as calculated using the current day's spot rate and the 30-, 60-, 90- and 180-day forward rates provided by an independent pricing agent. As of and during the year ended March 31, 2025, the Funds did not hold swaps, futures or foreign currency forward contracts.

Investments in open-end investment companies that do not trade on an exchange are valued at the end of day NAV per share. Investments in open-end investment companies that trade on an exchange are valued in the same manner as other exchange-traded equity securities (described above).

Investments for which market prices are not ''readily available,'' or are not deemed to reflect current market values, or are debt securities where no evaluated price is available from third-party pricing agents pursuant to established methodologies, are fair valued in accordance with the Adviser's valuation policies and procedures approved by the Board. Some of the more common reasons that may necessitate that a security be valued using ''fair value'' pricing may include, but are not limited to: the security's trading has been halted or suspended; the security's primary trading market is temporarily closed; or the security has not been traded for an extended period of time.

In addition, a Fund may fair value its securities if an event that may materially affect the value of a Fund's securities that trade outside of the United States (a ''Significant Event'') has occurred between the time of the security's last close and the time that a Fund calculates its NAV. A Significant Event may relate to a single issuer or to an entire market sector, country or region. Events that may be Significant Events may include: government actions, natural disasters, armed conflict, acts of terrorism and significant market fluctuations. If Krane becomes aware of a Significant Event that has occurred with respect to a portfolio instrument or group of portfolio instruments after the closing of

**Notes to Financial Statements (continued)**

the exchange or market on which the portfolio instrument or portfolio instruments principally trade, but before the time at which a Fund calculates its NAV, it will notify the Administrator and may request that an ad hoc meeting of the Fair Value Pricing Committee be called.

With respect to trade-halted securities, the Adviser typically will fair value a trade-halted security by adjusting the security's last market close price by the security's sector performance, as measured by a predetermined index, unless Krane's Fair Value Pricing Committee determines to make additional adjustments.

Fair value pricing involves subjective judgments and it is possible that a fair value determination for a security is materially different than the value that could actually be realized upon the sale of the security or that another fund that uses market quotations or its own fair value procedures to price the same securities.

Trading in securities on many foreign exchanges is normally completed before the close of business on each Business Day (a "Business Day", as used herein, is any day on which the Exchange is open for business). In addition, securities trading in a particular country or countries may not take place on each Business Day or may take place on days that are not Business Days. Changes in valuations on certain securities may occur at times or on days on which a Fund's NAV is not calculated and on which Fund shares do not trade and sales and redemptions of shares do not occur. As a result, the value of a Fund's portfolio securities and the net asset value of its shares may change on days when share purchases or sales cannot occur. Fund shares are purchased or sold on a national securities exchange at market prices, which may be higher or lower than NAV. Transactions in Fund shares will be priced at NAV only if shares are purchased or redeemed directly from a Fund in Creation Units. No secondary sales will be made to brokers or dealers at a concession by the Distributor or by a Fund. Purchases and sales of shares in the secondary market, which will not involve a Fund, will be subject to customary brokerage commissions and charges.

In accordance with the authoritative guidance on fair value measurements and disclosure under U.S. GAAP, the Funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1 – Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date.

Level 2 – Other significant observable inputs (including quoted prices in non-active markets, quoted prices for similar investments, fair value of investments for which the Funds have the ability to fully redeem tranches at net asset value as of the measurement date or within the near term, and short-term investments valued at amortized cost).

Level 3 – Significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments, broker quotes, fair value of investments for which the Fund does not have the ability to fully redeem tranches at net asset value as of the measurement date or within the near term).

**Notes to Financial Statements (continued)**

Investments are classified within the level of the lowest significant input considered in determining fair value. Investments classified within Level 3 whose fair value measurement considers several inputs may include Level 1 or Level 2 inputs as components of the overall fair value measurement. For details of the investment classification, refer to each Fund's Schedule of Investments.

FEDERAL INCOME TAXES — It is each Fund's intention to qualify or continue to qualify as a regulated investment company for federal income tax purposes by complying with the appropriate provisions of Subchapter M of the Internal Revenue Code of 1986, as amended, and to distribute annually all or substantially all of its taxable income and gains to shareholders. Accordingly, no provisions for federal income taxes have been made in the financial statements.

The Funds evaluate tax positions taken or expected to be taken in the course of preparing the Funds' tax returns to determine whether it is "more-likely-than-not" (i.e., greater than 50 percent) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. The Funds did not record any tax provisions in the current period. However, management's conclusions regarding tax positions may be subject to review and adjustment at a later date based on factors including, but not limited to, examination by tax authorities (i.e., the last three tax year ends, as applicable), on-going analysis of and changes to tax laws, regulations and interpretations thereof.

As of March 31, 2025, management of the Funds has reviewed all open tax years since inception and concluded that there is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns. The Funds are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

SECURITY TRANSACTIONS AND INVESTMENT INCOME — Security transactions are accounted for on the trade date for financial reporting purposes. Costs used in determining realized gains and losses on the sale of investment securities are based on specific identification. Dividend income is recorded, net of any applicable withholding tax, on the ex-dividend date, or for certain foreign securities, when the information becomes available to the Funds. Interest income is recognized on the accrual basis from the settlement date and includes the amortization of premiums and the accretion of discount calculated using the effective interest method.

OPTIONS — The Quadratic Interest Rate Volatility and Inflation Hedge ETF purchases options seeking to benefit from relative interest rate movements, whether these movements arise from falling short-term interest rates or rising long-term interest rates (i.e., the spread between interest rates on U.S. interest rates and shorter-term interest widens), and to benefit from market stress when fixed income volatility increases. The Quadratic Deflation ETF purchases options seeking to benefit from relative interest rate movements, whether these movements arise from rising short-term interest rates or falling long-term interest rates (i.e., the spread between interest rates on U.S. interest rates and shorter-term interest narrows). When each Fund purchases an option, the Fund pays a cost (premium) to purchase the option. The Funds' investments in options will be traded in the OTC market. OTC derivative instruments generally have more flexible terms negotiated between the buyer and the seller. These instruments would generally be subject to greater counterparty risk. Many of the protections afforded to exchange participants will not be available for OTC options and there is no daily price fluctuation limits. OTC instruments also may be subject to greater liquidity risk. Under the Funds' option contracts, the Funds pay upfront for the option contracts (i.e., the premium), and counterparties are not required to post variation margin. There is no potential

**Notes to Financial Statements (continued)**

additional cash outflow or future liability for the Funds under the options; the Funds' only potential loss on such options is the premium paid in advance. However, the Funds' options contracts are subject to counterparty risk, which is the risk of non-performance by an options counterparty. Such non-performance could result in a material loss to the Funds.

As of March 31, 2025, the Funds have open purchased option positions. Refer to each Fund's Schedule of Investments for details regarding open options as of March 31, 2025.

For the year ended March 31, 2025, the average monthly cost for purchased options in the Quadratic Interest Rate Volatility and Inflation Hedge ETF and Quadratic Deflation ETF was $71,587,304 and $1,323,429, respectively.

The following is a summary by counterparty of the market value of OTC financial derivative instruments and collateral (received)/pledged for each Fund as of March 31, 2025:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Quadratic Interest Rate Volatility and Inflation Hedge ETF** | **Quadratic Interest Rate Volatility and Inflation Hedge ETF** | **Quadratic Interest Rate Volatility and Inflation Hedge ETF** | **Quadratic Interest Rate Volatility and Inflation Hedge ETF** | **Quadratic Interest Rate Volatility and Inflation Hedge ETF** | **Quadratic Interest Rate Volatility and Inflation Hedge ETF** | **Quadratic Interest Rate Volatility and Inflation Hedge ETF** | **Quadratic Interest Rate Volatility and Inflation Hedge ETF** |
| | **Financial Derivative<br> Assets** | **Financial Derivative<br> Assets** | **Financial Derivative**<br> **Liabilities** | **Financial Derivative**<br> **Liabilities** | | | |
| <br>**Counterparty** | **Option** | **Total Over<br> the Counter** | **Option** | **Total Over<br> the Counter** | **Net Market**<br>**Value of OTC<br> Derivatives** | **Collateral**<br>**(Received)/<br> Pledged** |<br>**Net<br> Exposure<sup>†</sup>** |
| Goldman Sachs | $15872128 | $15872128 | $— | $— | $15872128 | $— | $15872128 |
| Morgan Stanley | 27625374 | 27625374 |  |  | 27625374 |  | 27625374 |
| Nomura | 21948876 | 21948876 |  |  | 21948876 |  | 21948876 |
| Total over the counter | $65446378 | $65446378 | $— | $— |  |  |  |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Quadratic Deflation ETF** | **Quadratic Deflation ETF** | **Quadratic Deflation ETF** | **Quadratic Deflation ETF** | **Quadratic Deflation ETF** | **Quadratic Deflation ETF** | **Quadratic Deflation ETF** | **Quadratic Deflation ETF** |
| | **Financial Derivative<br> Assets** | **Financial Derivative<br> Assets** | **Financial Derivative**<br> **Liabilities** | **Financial Derivative**<br> **Liabilities** | | | |
| <br>**Counterparty** | **Option** | **Total Over<br> the Counter** | **Option** | **Total Over<br> the Counter** | **Net Market**<br>**Value of OTC<br> Derivatives** | **Collateral**<br>**(Received)/<br> Pledged** |<br>**Net<br> Exposure<sup>†</sup>** |
| Goldman Sachs | $213305 | $213305 | $— | $— | $213305 | $— | $213305 |
| Nomura | 228661 | 228661 |  |  | 228661 |  | 228661 |
| Total over the counter | $441966 | $441966 | $— | $— |  |  |  |

---

*†* *Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can be netted only across transactions governed under the same master agreement with the same legal entity.* 

**Notes to Financial Statements (continued)**

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS — Each Fund has a practice of seeking to pay monthly distributions at a level rate. To help maintain more stable monthly distributions, the distribution paid by a Fund for any particular monthly period may be more or less than the amount of net income actually earned by the Fund during such period. The practice of seeking to pay distributions at a level rate may result in a return of capital to shareholders, which is not taxable but reduces a shareholder's basis in his or her shares, if the Fund's income and gains are not sufficient to support the level rate distribution.

Ordinarily, each Fund typically distributes any net investment income monthly and makes any capital gain distributions once a year (usually in December). Each Fund may make distributions on a more frequent basis. All distributions are recorded on the ex-dividend date.

CASH OVERDRAFT CHARGES — Per the terms of an agreement with Brown Brothers Harriman & Co. ("BBH"), the Funds' Custodian, if a Fund has a cash overdraft on a given day, it will be assessed an overdraft charge of BBH Overdraft Base Rate plus 2.00%. Cash overdraft charges are included in "Interest Expense" on the Statements of Operations.

CREATION UNITS — The Funds issue and redeem Shares at NAV and only in large blocks of Shares (each block of Shares is a Creation Unit of 25,000 Shares, or multiples thereof). In its discretion, the Trust reserves the right to increase or decrease the number of each Fund's shares that constitute a Creation Unit.

Except when aggregated in Creation Units, Shares are not redeemable securities of a Fund. Shares of a Fund may only be purchased or redeemed by certain Authorized Participants. An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a Depository Trust Company participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors will not qualify as Authorized Participants or have the resources to buy and sell whole Creation Units. Therefore, they will be unable to purchase or redeem the Shares directly from a Fund. Rather, most retail investors will purchase Shares in the secondary market with the assistance of a broker and will be subject to customary brokerage commissions or fees when buying or selling Shares. If a Creation Unit is purchased or redeemed for cash, a higher transaction fee may be charged.

The Adviser may adjust the transaction fees from time to time based on actual experience.

CASH AND CASH EQUIVALENTS — Idle cash balances may be swept into various overnight sweep accounts and are classified as cash equivalents on the Statement of Assets and Liabilities. These amounts, at times, may exceed United States federally insured limits. Amounts swept are usually available on the next business day. For that reason, each Fund is subject to custodial risk as a result of (1) holding cash at the Fund's custodian because such cash deposits are unsecured liabilities of the custodian and (2) the custodian, at times, sweeping excess cash to other banks, which would be unsecured liabilities of those other banks.

**3. RELATED PARTY TRANSACTIONS**

INVESTMENT ADVISORY AGREEMENT — The Adviser serves as investment adviser to each Fund pursuant to an Investment Advisory Agreement between the Trust on behalf of each Fund and the Adviser (the "Agreement"). Under the Agreement, Krane is responsible for reviewing, supervising and

**Notes to Financial Statements (continued)**

administering each Fund's investment program and the general management and administration of the Trust. The Board supervises Krane and establishes policies that Krane must follow in its management activities.

The Agreement requires the Adviser to pay all operating expenses of the Funds, except: (a) interest and taxes (including, but not limited to, income, excise, transaction, transfer and withholding taxes); (b) expenses of the Funds incurred with respect to the acquisition and disposition of portfolio securities and the execution of portfolio transactions, including brokerage commissions and short sale dividend or interest expense; (c) expenses incurred in connection with any distribution plan adopted by the Trust in compliance with Rule 12b-1 under the Investment Company Act, including distribution fees; (d) "Acquired Fund Fees and Expenses" (as defined by Form N-1A under the Investment Company Act); (e) litigation expenses; (f) the compensation payable to the Adviser under the Agreement; (g) compensation and expenses of the Independent Trustees (including any fees of independent legal counsel to the Independent Trustees); and (h) any expenses determined to be extraordinary expenses by the Board. Under the Agreement, a portion of the premium for the insurance policy, which covers the Trust and Independent Trustees, is treated as an expense of the Independent Trustees.

The Agreement provides that each Fund pays a unitary (or unified) fee to the Adviser for advisory and management services provided to the Funds, subject to the exceptions noted herein. In this context, there exists a risk that a Trust service provider will seek recourse against the Trust if it is not timely paid by Krane for the fees and expenses for which it is responsible, which could materially adversely affect the Funds. Pursuant to the Agreement between the Trust and the Adviser, the Funds pay the Adviser a fee, which is calculated daily and paid monthly, at the following annual rates, based on a percentage of the average daily net assets of each Fund.

---

| | |
|:---|:---|
|  | **Management<br> Fee** |
| Quadratic Interest Rate Volatility and Inflation Hedge ETF | 0.99% |
| Quadratic Deflation ETF | 0.99% |

---

The Adviser bears all of its own costs associated with providing these advisory services.

SUB-ADVISORY AGREEMENT — Quadratic serves as the Sub-Adviser to the Funds and is responsible for the day-to-day management of the Funds, subject to the supervision by the Adviser and the Board. For the services Quadratic provides to the Funds, the Adviser pays Quadratic a fee equal to 76% of the sum of: (i) the total gross management fee due to the Adviser from the Fund under the terms of the Advisory Agreement minus (ii) any applicable fee waivers from time to time entered into between the Fund and the Adviser. Under the Sub-Advisory Agreement, the fee will be calculated daily and paid monthly.

DISTRIBUTION AGREEMENT — SEI Investments Distribution Co. (the "Distributor"), a wholly-owned subsidiary of SEI Investments Company, and an affiliate of the Administrator, serves as the Funds' distributor of Creation Units pursuant to a Distribution Agreement. The Distributor does not maintain any secondary market in Fund shares.

The Trust has adopted a Distribution and Service Plan ("Plan") pursuant to Rule 12b-1 under the Investment Company Act. In accordance with the Plan, each Fund is authorized to pay an amount up to 0.25% of its average daily net assets each year for certain distribution-related activities. For

**Notes to Financial Statements (continued)**

the year ended March 31, 2025, no fees were charged under the Plan, since no such fees are currently paid by the Funds and the Board has not currently approved the commencement of any payments under the Plan. Fees would only be charged under the Plan upon approval by the Board.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT — SEI Investments Global Funds Services (the "Administrator") serves as the Funds' Administrator pursuant to an Administration Agreement. BBH serves as the Funds' Custodian and Transfer Agent pursuant to a Custodian and Transfer Agent Agreement.

**4. INVESTMENT TRANSACTIONS**

For the year ended March 31, 2025, the Funds did not have purchases and sales of investments in securities excluding in-kind transactions, options, long-term U.S. Government and short-term securities.

For the year ended March 31, 2025, in-kind transactions associated with creations and redemptions were:

---

| | | | |
|:---|:---|:---|:---|
|  | **Purchases** | **Sales** | **Realized <br> Gain/(Loss)** |
| Quadratic Interest Rate Volatility and Inflation Hedge ETF | $156161850 | $427408144 | $(32473220) |
| Quadratic Deflation ETF | 2236462 | 15907082 | (7544918) |

---

**5. TAX INFORMATION**

The amount and character of income and capital gain distributions to be paid, if any, are determined in accordance with Federal income tax regulations, which may differ from U.S. GAAP. For example, the income or loss resulting from the Funds' investments in derivatives tied to interest rates is characterized as ordinary income or loss, even though such derivatives may be characterized as capital assets and realized gain (loss) for purposes of U.S. GAAP. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent. The permanent difference is income or loss resulting from the Funds' investments in derivatives tied to interest rates that is characterized as ordinary income or loss, even though such derivatives may be characterized as capital assets for purposes of U.S. GAAP. The permanent difference that is credited or charged to Paid-in-Capital and Distributable Earnings is redemption in-kind transactions and net operating loss. To the extent these differences are permanent in nature, such as redemption in kind transactions and net operating loss, they are charged or credited to distributable earnings (loss) or paid-in capital, as appropriate, in the period that the differences arise.

---

| | | |
|:---|:---|:---|
|  | **Distributable<br> Earnings/(Loss)** | **Paid-in <br> Capital** |
| Quadratic Interest Rate Volatility and Inflation Hedge ETF | $109635296 | $(109635296) |
| Quadratic Deflation ETF | 8214222 | (8214222) |

---

The tax character of dividends and distributions paid during the years ended March 31, 2025 and March 31, 2024 were as follows:

**Notes to Financial Statements (continued)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Ordinary<br> Income** | **Long-Term<br> Capital Gain** | **Return of<br> Capital** | **Totals** |
| Quadratic Interest Rate Volatility and Inflation Hedge ETF |  |  |  |  |
| 2025 | $— | $— | $21677257 | $21677257 |
| 2024 |  |  | 31848020 | 31848020 |
| Quadratic Deflation ETF |  |  |  |  |
| 2025 | $— | $— | $692544 | $692544 |
| 2024 | 2094154 |  | 271781 | 2365935 |

---

As of March 31, 2025, the components of tax basis distributable losses were as follows:

---

| | | |
|:---|:---|:---|
|  | **Quadratic Interest Rate<br> Volatility and Inflation<br> Hedge ETF** | **Quadratic<br> Deflation ETF** |
| Capital Loss Carryforwards | (22620861) | (3535219) |
| Qualified Late-Year Loss Deferrals | (24016282) | (281000) |
| Unrealized Depreciation on Investments and Foreign Currency | (82566614) | (5056717) |
| Other Temporary Differences | (2) | 1 |
| Total Distributable Loss | $(129203759) | $(8872935) |

---

Qualified late year ordinary and Post-October capital losses represent losses realized from January 1, 2025 through March 31, 2025 and November 1, 2024 through March 31, 2025, respectively, that, in accordance with Federal income tax regulations, the Funds have elected to defer and treat as having arisen in the following fiscal year.

The Funds have capital loss carryforwards as follows:

---

| | | |
|:---|:---|:---|
|  | **Long-Term<br> Loss** | **Total** |
| Quadratic Interest Rate Volatility and Inflation Hedge ETF | $22620861 | $22620861 |
| Quadratic Deflation ETF | 3535219 | 3535219 |

---

The federal tax cost and aggregate gross unrealized appreciation and depreciation on investments held by the Fund at March 31, 2025, were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Federal Tax<br> Cost** | **Aggregated<br> Gross<br> Unrealized<br> Appreciation** | **Aggregated<br> Gross <br> Unrealized <br> Depreciation** | **Net Unrealized <br> Depreciation** |
| Quadratic Interest Rate Volatility and Inflation Hedge ETF | $529190144 | $– $| (82566614) | $(82566614) |
| Quadratic Deflation ETF | 14109362 | – | (5056717) | (5056717) |

---

**Notes to Financial Statements (continued)**

**6. CONCENTRATION OF RISKS**

As with all exchange-traded funds ("ETFs"), shareholders of the Funds are subject to the risk that their investment could lose money. Each Fund is subject to certain of the principal risks noted below, any of which may adversely affect a Fund's NAV, trading price, yield, total return and ability to meet its investment objective. A more complete description of principal risks is included in each Fund's prospectus under the heading "Principal Risks".

CASH AND CASH EQUIVALENTS RISK — The Funds may hold cash or cash equivalents. Generally, such positions offer less potential for gain than other investments. Holding cash or cash equivalents, even strategically, may lead to missed investment opportunities. This is particularly true when the market for other investments in which the Funds may invest is rapidly rising. If a Fund holds cash uninvested it will be subject to the credit risk of the depositing institution holding the cash.

DERIVATIVES RISK — The use of derivatives (including swaps, futures, forwards, structured notes and options) may involve leverage, which includes risks that are different from, and greater than, the risks associated with investing directly in a reference asset, because a small investment in a derivative can result in a large impact on a Fund and may cause a Fund to be more volatile. Derivatives may at times be highly illiquid, and a Fund may not be able to close out or sell a derivative at a particular time or at an anticipated price. Derivatives can be difficult to value and valuation may be more difficult in times of market turmoil. There may be imperfect correlation between the derivative and that of the reference asset, resulting in unexpected returns that could materially adversely affect a Fund. Certain derivatives (such as swaps and options) are bi-lateral agreements that expose the Funds to counterparty risk, which is the risk of loss in the event that the counterparty to an agreement fails to make required payments or otherwise comply with the terms of derivative. In that case, the Funds may suffer losses potentially equal to, or greater than, the full value of the derivative if the counterparty fails to perform its obligations. That risk is generally thought to be greater with over-the-counter (OTC) derivatives than with derivatives that are exchange traded or centrally cleared. Counterparty risks are compounded by the fact that there are only a limited number of ways available to invest in certain reference assets and, therefore, there may be few counterparties to swaps or options based on those reference assets. Many derivatives are subject to segregation requirements that require the Funds to segregate the market or notional value of the derivatives, which could impede the portfolio management of the Funds.

The derivative instruments and techniques that the Funds may principally use include:

Options Risk. If a Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or swap on the underlying instrument at an agreed-upon price typically in exchange for a premium paid by the Funds. In general, most options on interest rate swaps are "European-style" options, which means that they can only be exercised at the end of the option term. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

The options strategies used by Quadratic Deflation ETF may involve writing covered options and are structured as long call spreads, long put spreads or long butterflies. If there is a broad market move, the strategies may not have the same return as a strategy composed of only long options. The Funds will pay a premium for their options strategies and they are structured to limit the potential loss to the Funds to the market value of the options strategy;

**Notes to Financial Statements (continued)**

however, there is no guarantee that this will occur. If an option that a Fund has purchased is never exercised or closed out, the Fund will lose the amount of the premium it paid and the use of those funds.

OTC options generally have more flexible terms negotiated between the buyer and the seller, but the counterparties may be required to post "variation margin" as frequently as daily to reflect any gains or losses in such options contracts. Where, as here, such variation margin is not required to be posted, such instruments are generally subject to greater credit risk and counterparty risk, which is the risk that the other party to the derivative will fail to make required payments or otherwise comply with the terms of the option. Counterparty risk may arise because of market activities and developments, the counterparty's financial condition (including financial difficulties, bankruptcy, or insolvency), or other reasons. OTC instruments also may be subject to greater liquidity risk.

ETF RISK. As ETFs, the Funds are subject to the following risks:

Authorized Participants Concentration Risk. The Funds have a limited number of financial institutions that may act as Authorized Participants. To the extent that Authorized Participants exit the business or are otherwise unable to proceed in creation and redemption transactions with the Fund and no other Authorized Participant is able to step forward to create or redeem, shares of that Fund may be more likely to trade at a premium or discount to NAV and possible face trading halts or delisting. Authorized Participant concentration risk may be heightened for ETFs, such as the Funds, that invest in securities issued by non-U.S. issuers or other securities or instruments that have lower trading volumes.

Premium/Discount Risk. There may be times when the market price of a Fund's shares is more than the NAV intra-day (at a premium) or less than the NAV intra-day (at a discount). As a result, shareholders of that Fund may pay more than NAV when purchasing shares and receive less than NAV when selling Fund shares. This risk is heightened in times of market volatility or periods of steep market declines. In such market conditions, market or stop loss orders to sell Fund shares may be executed at prices well below NAV.

Secondary Market Trading Risk. Investors buying or selling shares in the secondary market will normally pay brokerage commissions, which are often a fixed amount and may be a significant proportional cost for investors buying or selling relatively small amounts of shares. Secondary market trading is subject to bid-ask spreads and trading in a Fund's shares may be halted by the Exchange because of market conditions or other reasons. If a trading halt occurs, a shareholder may temporarily be unable to purchase or sell shares of a Fund. In addition, although the Funds' shares are listed on the Exchange, there can be no assurance that an active trading market for shares will develop or be maintained or that a Fund's shares will continue to be listed.

FIXED INCOME SECURITIES RISK — Investing in fixed income securities subjects the Funds to the following risks:

Credit Risk. Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer's credit rating or the market's perception of an issuer's creditworthiness may also affect the value of an investment in that issuer.

**Notes to Financial Statements (continued)**

Event Risk. Event risk is the risk that an unexpected event could interfere with an issuer's ability to make timely interest or principal payments or that causes market speculation about the issuer's ability to make such payments, which could cause the credit quality and market value of an issuer's bonds and/or other debt securities to decline significantly.

Interest Rate Risk. Generally, the value of fixed income securities will change inversely with changes in interest rates. As interest rates rise, the market value of fixed income securities tends to decrease. Conversely, as interest rates fall, the market value of fixed income securities tends to increase. This risk will be greater for long-term securities than for short-term securities. The current low interest rate environment increases the risks associated with rising interest rates.

Maturity Risk. The value of the Funds' fixed income investments is also dependent on their maturity. Generally, the longer the maturity of a fixed income security, the greater its sensitivity to changes in interest rates.

HEDGING RISK — The Quadratic Interest Rate Volatility and Inflation Hedge ETF seeks to mitigate (or hedge) the risk associated with the potential impact of a steepening U.S. interest rate curve ("curve risk"), an increase in inflation and inflation expectations, and an increase in interest rate volatility on the performance of U.S. government bonds. The Quadratic Deflation ETF seeks to mitigate (or hedge) the risk associated with the potential impact of a flattening or inverting U.S. interest rate curve ("curve risk"), deflation and deflationary expectations on the performance of U.S. government bonds.

Neither of the Funds seek to mitigate credit risk, non-curve interest rate risk, or other factors influencing the price of U.S. government bonds, which factors may have a greater impact on the bonds' returns than the U.S. interest rate curve or inflation. Further, there is no guarantee that the Funds' investments will eliminate or mitigate curve risk, inflation (deflation) risk or the potential impact of interest rate volatility on long positions in U.S. government bonds. If interest rates rise or fall in parallel within the U.S. interest rate curve, the Funds will not be hedged.

In addition, for the Quadratic Interest Rate Volatility and Inflation Hedge ETF, when the U.S. interest rate curve flattens or inverts, the Fund's investments in options may lose value or end up worthless. Under such circumstances, the Fund will generally underperform a portfolio comprised solely of U.S. government bonds (without the options owned by the Fund). In a flattening or inverted curve environment, the Fund's hedging strategy could result in disproportionately larger losses in the Fund's options as compared to gains or losses in its U.S. government bond positions attributable to interest rate changes. There is no guarantee that the Fund will have positive returns, even in environments of sharply rising inflation rates in which the Fund's options might be expected to mitigate the effects of such rises. The Fund will incur expenses when entering into positions in rate-linked options. Moreover, to the extent that curve risk has been priced into the U.S. government bonds owned by the Fund, the Fund will underperform other investments even during periods of curve steepening.

In addition, for the Quadratic Deflation ETF when the U.S. interest rate curve steepens, the Fund's investments in options may lose value or end up worthless. Under such circumstances, the Fund will generally underperform a portfolio comprised solely of U.S. government bonds (without the options owned by the Fund). In a steepening curve environment, the Fund's hedging strategy could result in disproportionately larger losses in the Fund's options as compared to gains or losses in its U.S. government bond positions attributable to interest rate changes. There is no guarantee

**Notes to Financial Statements (continued)**

that the Fund will have positive returns, even in environments of sharply declining inflation rates. The Fund will incur expenses when entering into positions in rate-linked options. Moreover, to the extent that curve risk has been priced into the U.S. government bonds owned by the Fund, the Fund will underperform other investments even during periods of curve flattening.

HIGH PORTFOLIO TURNOVER RISK — The Funds may incur high portfolio turnover rates, which may increase the Funds' brokerage commission costs and negatively impact the Funds' performance. Such portfolio turnover also may generate net short-term capital gains.

INVESTMENT IN INVESTMENT COMPANIES RISK — When a Fund invests in other investment companies (or funds), it will indirectly be exposed to the risks of such funds' investments. Moreover, a Fund will incur its pro rata share of such funds' expenses. Additionally, investments in ETFs are subject to ETF Risk.

LARGE SHAREHOLDER RISK — To the extent a large number of shares of a Fund is held by a single shareholder or a small group of shareholders, the Fund is subject to the risk that redemption by those shareholders of all or a large portion of their shares will adversely affect the Fund's performance by forcing the Fund to sell securities, potentially at disadvantageous prices, to raise the cash needed to satisfy such redemption requests. This risk may be heightened during periods of declining or illiquid markets, or to the extent that such large shareholders have short investment horizons or unpredictable cash flow needs. Such redemptions may also increase transaction costs and/or have adverse tax consequences for remaining shareholders.

LIQUIDITY RISK — The Funds' investments are subject to liquidity risk, which exists when an investment is or becomes difficult or impossible to purchase or sell at an advantageous time and price. Liquidity risk may be the result of, among other things, market turmoil, the reduced number and capacity of traditional market participants, or the lack of an active trading market. Markets for securities or financial instruments could be disrupted by a number of events, including, but not limited to, an economic crisis, natural disasters, new legislation or regulatory changes inside or outside the U.S. Liquid investments may become less liquid after being purchased by a Fund, particularly during periods of market stress. In addition, if a transaction is particularly large or if the relevant market is or becomes illiquid, it may not be possible to initiate a transaction or liquidate a position, which may cause a Fund to suffer significant losses and difficulties in meeting redemptions. If a number of securities held by a Fund stop trading, it may have a cascading effect and cause a Fund to halt trading. Volatility in market prices will increase the risk of a Fund being subject to a trading halt.

MANAGEMENT RISK — The Funds are actively-managed and may not meet their investment objectives based on the Sub-Adviser's success or failure to implement investment strategies for the Funds. The Sub-Adviser's evaluations and assumptions regarding investments, interest rates, inflation, and other factors may not successfully achieve the Funds' investment objective given actual market conditions.

MARKET RISK — The values of the Funds' holdings could decline generally or could underperform other investments. In addition, there is a risk that policy changes by the U.S. Government, Federal Reserve, and/or other government actors could cause volatility in global financial markets and negative sentiment, which could have a negative impact on a Fund and could result in losses. Geopolitical and other risks, including environmental and public health risks may add to instability in world economies and markets generally. Changes in value may be temporary or may last for

**Notes to Financial Statements (continued)**

extended periods. Further, the Funds are susceptible to the risk that certain investments may be difficult or impossible to sell at a favorable time or price. Market developments may also cause a Funds' investment to become less liquid and subject to erratic price movements.

NON-DIVERSIFIED FUND RISK — Because the Funds are non-diversified and may invest a greater portion of their assets in fewer issuers than a diversified fund, changes in the market value of a single portfolio holding could cause greater fluctuations in a Fund's share price than would occur in a diversified fund. This may increase a Fund's volatility and cause the performance of a single portfolio holding or a relatively small number of portfolio holdings to have a greater impact on the Fund's performance.

RATE-LINKED DERIVATIVES INVESTMENT RISK — The Funds exposure to derivatives tied to interest rates subjects the Funds to greater volatility than investments in traditional securities, such as stocks and bonds. Investing in derivatives tied to interest rates, including through options tied to the shape of the U.S. interest rate curve, can be extremely volatile. The value of such investments may fluctuate rapidly based on a variety of factors, including overall market movements; economic events and policies; changes in interest rates or inflation rates; changes in monetary and exchange control programs; war; acts of terrorism; natural disasters; and technological developments.

The Quadratic Interest Rate Volatility and Inflation Hedge ETF is expected to benefit from the options it holds if the U.S. interest rate curve steepens during the time period in which the Fund holds the options. However, if the U.S. interest rate curve flattens or inverts, the Fund will lose money on the options, up to the amount invested in option premiums, and underperform an otherwise identical bond fund that had not used such options. Rate-linked derivatives may lose money if interest rates change in a manner not anticipated by the Sub-Adviser. An increase in interest rates may cause the value of securities held directly or indirectly by the Fund to decline to the extent that the increase is not linked to a steepening of the U.S. interest rate curve or the Fund's hedging strategy is not effectively implemented. Even if the Fund is hedged against losses due to interest rate increases linked to U.S. interest rate curve steepening, outright interest rate increases may lead to heightened volatility in the fixed-income markets and may positively affect the value of the Fund's options while negatively impacting the Fund's investments in TIPS. There can be no assurance that the Fund's interest-rate linked options will accurately deliver positive returns if inflation experienced in the United States or the rate of expected future inflation reflected in the prices and yields of bonds held by the Fund rises. The Fund could lose money on the options held by the Fund, and the present value of the Fund's portfolio investments could decrease if inflation increases. These interest rate-linked options may also cause the Fund's net asset value and returns to be more volatile and expose the Fund to increased counterparty risk. Fluctuations in the steepness of the U.S. interest rate curve or the price of the options owned by the Fund could materially adversely affect an investment in the Fund. The Fund's investments in options are not intended to mitigate duration and credit risk or other factors influencing the price of U.S. government bonds, which may have a greater impact on the bonds' returns than curve risk. Moreover, to the extent that curve risk has been priced into the government bonds owned directly or indirectly by the Fund, the Fund could underperform other investments even during inflationary periods. There is no guarantee that the Fund will have positive performance even in environments of sharply rising inflation. There is no guarantee that the Fund will be able to successfully mitigate inflation risk or that bond values and interest rates will match changes in inflation rates.

**Notes to Financial Statements (continued)**

The Quadratic Deflation ETF is expected to benefit from the options it holds if the U.S. interest rate curve flattens or inverts during the time period in which the Fund holds the options. However, if the U.S. interest rate curve steepens, the Fund will lose money on the options, up to the amount invested in option premiums, and underperform an otherwise identical bond fund that had not used such options. Rate-linked derivatives may lose money if interest rates change in a manner not anticipated by the Sub-Adviser. An increase in interest rates may cause the value of securities held directly or indirectly by the Fund to decline to the extent that the increase is not linked to a flattening or inverting of the U.S. interest rate curve or the Fund's hedging strategy is not effectively implemented. Even if the Fund is hedged against losses due to interest rate increases linked to U.S. interest rate curve flattening or inverting, outright interest rate increases may lead to heightened volatility in the fixed-income markets and may positively affect the value of the Fund's options while negatively impacting the Fund's investments in Treasuries. There can be no assurance that the Fund's interest-rate linked options will accurately deliver positive returns if deflation experienced in the United States or the rate of expected future inflation reflected in the prices and yields of bonds held by the Fund declines. The Fund could lose money on the options held by the Fund, and the present value of the Fund's portfolio investments could decrease if deflation occurs. These interest rate-linked options may also cause the Fund's net asset value and returns to be more volatile and expose the Fund to increased counterparty risk. Fluctuations in the steepness of the U.S. interest rate curve or the price of the options owned by the Fund could materially adversely affect an investment in the Fund. The Fund's investments in options are not intended to mitigate duration and credit risk or other factors influencing the price of U.S. government bonds, which may have a greater impact on the bonds' returns than curve risk. Moreover, to the extent that curve risk has been priced into the government bonds owned directly or indirectly by the Fund, the Fund could underperform other investments even during deflationary periods. There is no guarantee that the Fund will have positive performance even in environments of sharply declining inflation. There is no guarantee that the Fund will be able to successfully mitigate deflation risk or that bond values and interest rates will match changes in inflation rates.

RETURN OF CAPITAL DISTRIBUTIONS FROM THE FUND REDUCE THE TAX BASIS OF FUND SHARES — Historically, a portion of the Funds' distributions have been treated as a return of capital for tax purposes. Return of capital distributions are not taxable income to you but reduce your tax basis in your shares of a Fund. Such a reduction in tax basis will result in larger taxable gains and/or lower tax losses on a subsequent sale of shares of a Fund. There is no guarantee that the character of the Funds' distributions will be similar in the future.

TAX RISK — To qualify for the favorable U.S. federal income tax treatment accorded to a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended (the "Code"), each Fund must satisfy certain income, asset diversification and distribution requirements each year. Among other requirements, each Fund must derive at least 90% of its gross income each taxable year from certain qualifying sources of income and the Fund's assets must be diversified so that at least 50% of the value of the Fund's total assets is represented by cash and cash items, U.S. government securities, securities of other RICs, and other securities, subject to certain other limitations (see the "Taxes" section in the SAI for additional information). The Funds' investments in certain rate-linked derivative instruments (such as rate-linked options) may generate income that is not qualifying income and such investments may not be treated as investments in "securities" for purposes of the asset diversification requirement. The Funds will also need to manage their exposure to derivatives counterparties for purposes of satisfying the diversification test. If a Fund were to fail to meet the qualifying income test or asset diversification test and fail to qualify as

**Notes to Financial Statements (continued)**

a RIC, it would be taxed in the same manner as an ordinary corporation, and distributions to its shareholders would not be deductible by the Fund in computing its taxable income, which would adversely affect the Fund's performance. The failure by the Fund to qualify as a RIC would have significant negative tax consequences to Fund shareholders and would significantly and adversely affect a shareholder's return on its investment in the Fund. Under certain circumstances, the Fund may be able to cure a failure to meet the qualifying income test or asset diversification test if such failure was due to reasonable cause and not willful neglect, but to do so the Fund may incur significant fund-level taxes, which would effectively reduce (and could eliminate) the Fund's returns.

TIPS RISK — U.S. Treasury Inflation-Protected Securities ("TIPS") are debt instruments issued by the by the United States Department of the Treasury. The principal of TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index ("CPI"). When TIPS mature, investors are paid the adjusted principal or original principal, whichever is greater. Interest payments on TIPS are unpredictable and will fluctuate as the principal and corresponding interest payments are adjusted for inflation. Inflation-indexed bonds generally pay a lower nominal interest rate than a comparable non-inflation-indexed bond. There can be no assurance that the CPI will accurately measure the real rate of inflation in the prices of goods and services. Any increases in the principal amount of TIPS will be considered taxable ordinary income, even though the Fund or applicable underlying ETF will not receive the principal until maturity. As a result, the Fund may make income distributions to shareholders that exceed the cash it receives. In addition, TIPS are subject to credit risk, interest rate risk, and maturity risk.

U.S. GOVERNMENT OBLIGATIONS RISK — Obligations of U.S. Government agencies and authorities receive varying levels of support and may not be backed by the full faith and credit of the U.S. Government, which could affect a Fund's ability to recover should they default. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so. Additionally, market prices and yields of securities supported by the full faith and credit of the U.S. government or other countries may decline or be negative for short or long periods of time.

VALUATION RISK — Independent market quotations for certain investments held by the Funds may not be readily available, and such investments may be fair valued or valued by a pricing service at an evaluated price. These valuations involve subjectivity and different market participants may assign different prices to the same investment. As a result, there is a risk that a Fund may not be able to sell an investment at the price assigned to the investment by the Fund.

**7. INDEMNIFICATIONS**

In the normal course of business, the Funds enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on future claims that may be made against the Funds and, therefore, cannot be established; however, based on experience, the risk of loss from such claims is considered remote.

**8. RECENT ACCOUNTING PRONOUNCEMENT**

In this reporting period, the Funds adopted FASB Accounting Standards Update 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures ("ASU 2023-07"). Adoption of the new standard impacted financial statement disclosures only and did not affect each Fund's financial position or the results of its operations. An operating segment is defined in Topic 280 as a component of a public entity that engages in business activities from which it

**Notes to Financial Statements (concluded)**

may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity's chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. Krane Funds Advisors, LLC acts as each Fund's CODM. Each Fund represents a single operating segment, as the CODM monitors the operating results of each Fund as a whole and each Fund's long-term strategic asset allocation is pre-determined in accordance with each Fund's single investment objective which is executed by each Fund's portfolio managers. The financial information in the form of each Fund's schedule of investments, total returns, expense ratios and changes in net assets (i.e., changes in net assets resulting from operations, subscriptions and redemptions), which are used by the CODM to assess the segment's performance versus each Fund's comparative benchmarks and to make resource allocation decisions for each Fund's single segment, is consistent with that presented within each Fund's financial statements. Segment assets are reflected on the accompanying Statements of Assets and Liabilities as "total assets" and significant segment expenses are listed on the accompanying Statements of Operations.

**9. SUBSEQUENT EVENTS**

The Funds have evaluated the need for additional disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no additional disclosures and/or adjustments were required to the financial statements.

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and Board of Trustees

KraneShares Trust:

*Opinion on the Financial Statements*

We have audited the accompanying statements of assets and liabilities of the funds listed in the Appendix, two of the funds comprising KraneShares Trust (the Funds), including the schedules of investments, as of March 31, 2025, the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years or periods listed in the Appendix. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Funds as of March 31, 2025, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods listed in the Appendix, in conformity with U.S. generally accepted accounting principles.

*Basis for Opinion*

These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of March 31, 2025, by correspondence with custodian, transfer agent, and brokers or by other appropriate auditing procedures when replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.

![](img_002.jpg)

We have served as the auditor of one or more KraneShares investment companies since 2017.

Philadelphia, Pennsylvania

May 27, 2025

**Report of Independent Registered Public Accounting Firm (concluded)**

**Appendix**

***Funds with inception during the year ended March 31, 2020:***

Quadratic Interest Rate Volatility and Inflation Hedge ETF

Statement of operations for the year ended March 31, 2025

Statements of changes in net assets for each of the years in the two-year period ended March 31, 2025

Financial highlights for each of the years in the five-year period ended March 31, 2025

***Funds with inception during the year ended March 31, 2022:***

Quadratic Deflation ETF

Statement of operations for the year ended March 31, 2025

Statements of changes in net assets for each of the years in the two-year period ended March 31, 2025

Financial highlights for each of the years in the three-year period ended March 31, 2025 and the period from September 20, 2021 (inception) through March 31, 2022

**Notice To Shareholders (Unaudited)**

For shareholders that do not have a March 31, 2025 tax year end, this notice is for informational purposes only. For shareholders with a March 31, 2025 tax year end, please consult your tax advisor as to the pertinence of this notice. For the fiscal year ended March 31, 2025, the Funds are designating the following items with regard to distributions paid during the year.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Return of<br> Capital<sup>(1)</sup>** | **Long-Term<br> Capital Gain<br> Distributions** | **Ordinary<br> Income<br> Distributions** | **Total<br> Distributions** | **Qualifying<br> for<br> Corporate<br> Dividends<br> Received<br> Deduction<sup>(2)</sup>** | **Qualifying<br> Dividend<br> Income<sup>(3)</sup>** | **U.S.<br> Government<br> Interest<sup>(4)</sup>** | **Interest<br> Related<br> Dividends<sup>(5)</sup>** | **Short Term<br> Capital Gain<br> Dividends<sup>(6)</sup>** | **Foreign Tax<br> Credit<sup>(7)</sup>** |
| *Quadratic Interest Rate Volatility and Inflation Hedge ETF* | *Quadratic Interest Rate Volatility and Inflation Hedge ETF* | *Quadratic Interest Rate Volatility and Inflation Hedge ETF* | *Quadratic Interest Rate Volatility and Inflation Hedge ETF* |  |  |  |  |  |  |
| 100.00% | 0.00% | 0.00% | 100.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| *Quadratic Deflation ETF* | *Quadratic Deflation ETF* | *Quadratic Deflation ETF* | *Quadratic Deflation ETF* |  |  |  |  |  |  |
| 100.00% | 0.00% | 0.00% | 100.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |

---

*(1)* *Return of capital is a payment received from the fund that is not considered to be taxable income. The return of capital distribution is considered to be a return of the investor's original investment and reduces the investor's cost basis in the fund.* 

*(2)* *Qualifying dividends represent dividends which qualify for the corporate dividends received deduction and are reflected as a percentage of ordinary income distributions (the total of short term capital gain and net investment income distributions).* 

*(4)* *"U.S. Government Interest" represents the amount of interest that was derived from U.S. Government obligations and distributed during the fiscal year. Generally, interest from direct U.S. Government obligations is exempt from state income tax. However, for shareholders who are residents of California, Connecticut and New York, the statutory threshold requirements were not satisfied to permit exemption of these amounts from state income.* 

*(5)* *The percentage in this column represents the amount of "Interest Related Dividends" and is reflected as a percentage of ordinary income distributions that is exempt from U.S. withholding tax when paid for foreign investors.* 

*(6)* *The percentage in this column represents the amount of "Short Term Capital Gain Dividends" and is reflected as a percentage of short term capital gain distributions that is exempt from U.S. withholding tax when paid for foreign investors.* 

*(7)* *The allocable share of foreign tax credit will be reported on Form 1099-DIV.* 

**OTHER INFORMATION (FORM N-CSR ITEMS 8-11) (Unaudited)**

**Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies.**

Not applicable.

**Item 9. Proxy Disclosures for Open-End Management Investment Companies.**

Not applicable.

**Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.**

Remuneration is shown on the Statements of Operations of the financial statements included in Item 7.

**Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.**

Not applicable.

This page intentionally left blank.

![](img_003.jpg)

---

| | |
|:---|:---|
| **KraneShares Trust:** | **Investment Sub-Adviser:** |
| 280 Park Avenue, 32nd Floor | Quadratic Capital Management LLC |
| New York, NY 10017 | 39 Lewis Street, 4th Floor |
| 1-855-857-2638 | Greenwich, CT 06830 |
| *http://kfafunds.com* |  |
| For inquires specific to The Quadratic Interest | **Distributor:** |
| Rate Volatility and Inflation Hedge ETF and | SEI Investments Distribution Co. |
| Quadratic Deflation ETF | One Freedom Valley Drive |
| +1-833-IVOL-ETF | Oaks, PA 19456 |
| (+1-833-486-5383) |  |
| *https://www.ivoletf.com* |  |
| 1-888-BNDD-007 | **Administrator:** |
| (1-888-263-3007) | SEI Investments Global Funds Services |
| *https://www.bnddetf.com* | One Freedom Valley Drive |
|  | Oaks, PA 19456 |
| **Investment Adviser:** | **Independent Registered Public Accounting Firm:** |
| Krane Funds Advisors, LLC | KPMG LLP |
| 280 Park Avenue, 32nd Floor | 1735 Market Street |
| New York, NY 10017 | Philadelphia, PA 19103 |

---

This information must be preceded or accompanied by a current prospectus for the Funds described.

![](img_004.jpg)

**KraneShares Trust:**

280 Park Avenue, 32nd Floor

New York, NY 10017

KRS-AR-003-0500

**Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies.**

Included under Item 7.

**Item 9. Proxy Disclosures for Open-End Management Investment Companies.**

Included under Item 7.

**Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.**

Included under Item 7.

**Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.**

Included under Item 7.

**Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.**

Not applicable to the Registrant.

**Item 13. Portfolio Managers of Closed-End Management Investment Companies.**

Not applicable to the Registrant.

**Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.**

Not applicable to the Registrant.

**Item 15. Submission of Matters to a Vote of Security Holders.**

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees during the period covered by this report.

**Item 16. Controls and Procedures.**

(a) The Registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR § 270.30a-3(c))) as of a date within 90 days of the filing date of the report, are effective based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR § 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR § 240.13a-15(b) or § 240.15d-15(b)).

(b) There has been no change in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR § 270.30a-3(d))) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.

**Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.**

Not applicable to the Registrant.

**Item 18. Recovery of Erroneously Awarded Compensation.**

(a) Not applicable to the Registrant.

(b) Not applicable to the Registrant.

**Item 19. Exhibits.**

[(a)(1) Code of Ethics filed herewith.](kraneshares_ex99codeeth.htm)

(a)(2) Not applicable to the Registrant.

[(a)(3) A separate certification for the principal executive officer and the principal financial officer of the Registrant as required by Rule 30a-2(a) under the Act (17 CFR § 270.30a-2(a)), is filed herewith.](kraneshares_ex99cert.htm)

(a)(4) Not applicable to the Registrant.

(a)(5) Not applicable to the Registrant.

[(b) Officer certifications as required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)), is filed herewith.](kraneshares_ex99-906cert.htm)

The certification furnished pursuant to Rule 30a-2(b) under the Act and Section 906 of the Sarbanes-Oxley Act will not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended ("Exchange Act"), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
| (Registrant) | KraneShares Trust |
| By (Signature and Title) | /s/ Jonathan Krane |
|  | Jonathan Krane |
|  | Principal Executive Officer |

---

Date: June 6, 2025

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

---

| | |
|:---|:---|
| By (Signature and Title) | /s/ Jonathan Krane |
|  | Jonathan Krane |
|  | Principal Executive Officer |

---

Date: June 6, 2025

---

| | |
|:---|:---|
| By (Signature and Title) | /s/ Jonathan Krane |
|  | Jonathan Krane |
|  | Principal Financial Officer |

---

Date: June 6, 2025

## Ex-99.Code

**Exhibit 99.CODE ETH**

**KRANESHARES TRUST**

**SARBANES-OXLEY CODE OF ETHICS** 

**(Principal Executive Officer/President and Principal Financial Officer/Treasurer)**

**<u>Introduction</u>**

The reputation and integrity of KraneShares Trust (the "Trust") are valuable assets that are vital to the Trust's success. The Board of Trustees (the "Board") of the Trust has adopted this Sarbanes-Oxley Code of Ethics (the "SOX Code") to encourage the Trust's Covered Officers (as defined below) to conduct the Trust's business in a manner that demonstrates a commitment to the highest standards of integrity. Covered Officers include the principal executive officer, the principal financial officer, the comptroller (or principal accounting officer), if any, and any person who performs a similar function.

The Trust has also adopted a Code of Ethics under Rule 17j-1 (the "Rule 17j-1 Code") under the Investment Company Act of 1940, as amended. The Trust's Rule 17j-1 Code is designed to prevent certain conflicts of interest that may arise when officers, employees, or trustees know about present or future fund transactions, have the power to influence those transactions, and engage in securities transactions in their personal account(s).

This SOX Code should be read in conjunction with the Trust's other policy statements, including its Rule 17j-1 Code and its Disclosure Controls and Procedures.

**<u>Purposes of the SOX Code</u>**

This SOX Code applies to each Covered Officer for the purpose of promoting:

● Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

● Full, fair, accurate, timely and understandable disclosure in reports and documents that the Trust files with, or submits to, the U.S. Securities and Exchange Commission (the "SEC") ("Reports"), and in other public communications made by the Trust;

● Compliance with applicable laws and governmental rules and regulations;

● The prompt internal reporting of violations of the SOX Code to an appropriate person or persons identified in the SOX Code; and

● Accountability for adherence to the SOX Code.

**<u>Chief Compliance Officer; Questions about the SOX Code</u>**

The Board has designated the Trust's Chief Compliance Officer (the "CCO") to implement and administer this SOX Code. Any questions about this SOX Code should be directed to the CCO.

The CCO is responsible for applying this SOX Code to specific situations in which questions are presented under it and has the authority to interpret this SOX Code in any particular situation. However, any approvals or waivers requested by a Covered Officer with respect to a provision of this SOX Code must be submitted in writing to the CCO for review and will be considered by the Audit Committee of the Board (the "Committee"), which will make a recommendation to the Board.

**<u>Principles for the Handling of Financial Information and Avoiding Conflicts of Interest</u>**

The Trust has adopted the following principles to govern the manner in which Covered Officers perform their duties. Specifically, Covered Officers shall:

● Act with honesty and integrity;

● Avoid violations of this SOX Code, including actual or apparent conflicts of interest with the Trust in personal and professional relationships;

● Provide information to the employees and service providers (e.g., each advisor, each sub-advisor, administrator, independent registered public accounting firm (auditor), outside counsel, custodian, etc.) of the Trust that is accurate, complete, objective, relevant, timely, and understandable;

● Endeavor to ensure full, fair, timely, accurate, and understandable disclosure in the Trust's Reports;

● Comply with the federal securities laws and other applicable laws and rules, such as the Internal Revenue Code of 1986;

● Act in good faith, responsibly, and with due care, competence and diligence, without knowingly misrepresenting material facts or subordinating independent judgment to another end;

● Respect the confidentiality of information acquired in the course of their work, except where disclosure is expressly permitted or is otherwise legally mandated;

● Record (or cause the recording of) entries in the Trust's books and records that are accurate;

● Refrain from using confidential information for personal advantage; and

● Discuss any material transaction or relationship that could reasonably be expected to give rise to a conflict of interest with the other Covered Officers, CCO or outside counsel, as appropriate.

**<u>Violations of the SOX Code</u>**

Any action that, directly or indirectly, materially contravenes one or more of the principles outlined above shall be treated as a violation of this SOX Code unless good cause for such apparent contravention is found to exist.

Dishonest or unethical conduct or conduct that is illegal will constitute a per se violation of this SOX Code, regardless of whether this SOX Code refers to that particular conduct.

A violation of this SOX Code may result in disciplinary action, up to and including termination of employment. The Trust must and will report all suspected criminal violations to the appropriate authorities for possible prosecution, and will investigate, address and report as appropriate, non-criminal violations.

**<u>Enforcement of SOX Code Violations</u>**

If a Covered Officer or the CCO observes, learns of, or, in good faith, suspects a current or threatened violation of this SOX Code, he or she must immediately report the violation or suspected violation in writing to the CCO, the Trust's senior management, or to the Committee. An example of a possible SOX Code violation is the preparation and filing of financial disclosure that omits material facts, or that is accurate but is written in a way that obscures its meaning.

The CCO will follow the below procedures in investigating and enforcing this SOX Code. The CCO may, in his or her discretion, consult with outside counsel, the Trust's auditors, the Trust's senior management or the Board in determining how to address the suspected violation.

● The CCO will take all appropriate action to investigate any potential violations reported;

● The CCO will review with the outside counsel to the Trust the findings and conclusions of such investigation;

● If, after such investigation and review, the CCO believes that no violation has occurred, the CCO is not required to take any further action;

● If, after such investigation and review, the CCO believes that a violation has occurred, the CCO will report it to the Committee;

● If the Committee concurs that a violation has occurred, it will report the violation to the Board and make a recommendation to the Board as to the appropriate response. An appropriate response may include review of, and modifications to, certain policies and procedures (including this SOX Code), notification of the violation to the investment advisor, the Trust administrator and/or other Trust service providers, or disciplinary action against the Covered Officer, which may include, without limitation, dismissal;

● The Board may grant waivers of the SOX Code, as appropriate; and

● Any changes to or waivers of this SOX Code will, to the extent required, be disclosed as provided by SEC rules.

**<u>Disclosure of Existing or Potential Conflicts of Interest</u>**

Covered Officers shall file a letter (a "Disclosure Letter") regarding any transaction or relationship that reasonably appears to involve an actual or apparent conflict of interest with the Trust within ten days of becoming aware of such transaction or relationship. A Disclosure Letter should be prepared regarding these transactions or relationships whether the Covered Officer is involved or has only observed the transaction or relationship. All Disclosure Letters shall be addressed and submitted to the CCO, or if it is not possible to disclose the matter to the CCO, then the Disclosure Letter shall be addressed and submitted to the Committee.

The Committee will review all Disclosure Letters and determine whether further action is warranted. All determinations will be documented in writing and will be maintained by the CCO or other appropriate officers of the Trust.

**<u>Outside Service Providers</u>**

Because, as a practical matter, service providers to the Trust, such as the administrator, independent registered public accounting firm, and custodian, are materially responsible for the recording, processing, summarizing and reporting with respect to the Trust's financial statements, Covered Officers should be alert for actions by such service providers that may be illegal, or that could be viewed as dishonest or unethical conduct. Under this SOX Code, Covered Officers must promptly report these actions to the CCO.

**<u>Non-Retaliation Policy</u>**

Covered Officers who report violations or suspected violations in good faith will not be subject to retaliation of any kind. Reported violations will be investigated and addressed promptly and will be treated confidentially to the extent possible.

**<u>Initial and Annual Affirmation of the SOX Code</u>**

The CCO will review with the Covered Officers (i) the contents and importance of this SOX Code and related policies; (ii) the manner in which violations must be reported; and (iii) how Disclosure Letters must be submitted. Each Covered Officer will be asked to affirm in writing that he or she has received, read and understands this SOX Code, and annually thereafter must affirm that he or she has complied with the requirements of this SOX Code. Forms of the initial and annual affirmations are attached hereto as Exhibit A and Exhibit B.

**Exhibit A**

**KraneShares Trust (the "Trust")**<br>

**<u>Initial Covered Officer Affirmation of Understanding</u>**

In accordance with the Trust's Sarbanes-Oxley Code of Ethics (the "SOX Code"), the undersigned Covered Officer (as defined in the SOX Code) of the Trust hereby affirms to the Trust's Board of Trustees that the Covered Officer has received, read, and understands the SOX Code.

---

| | |
|:---|:---|
| Date: | |
| | Principal Executive Officer – Jonathan Krane |
| Date: | |
|  | Principal Financial Officer – Jonathan Krane |

---

**Exhibit B**

**KraneShares Trust (the "Trust")**<br>

**<u>Annual Covered Officer Affirmation</u>**

**For the period April 1, 20_____ to March 31, 20_____**

In accordance with the Trust's Sarbanes-Oxley Code of Ethics (the "SOX Code"), the undersigned Covered Officer (as defined in the SOX Code) of the Trust hereby affirms to the Trust's Board of Trustees that the Covered Officer, at all times during the period for which this affirmation is given, has complied with each of the requirements of the SOX Code.

---

| |
|:---|
| Date: |
| Principal Executive Officer<br> Jonathan Krane |
| Principal Financial Officer<br> Jonathan Krane |

---

## Ex-99.Cert

**Exhibit 99.CERT**

**CERTIFICATION**

**Pursuant to Rule 30a-2(a) under the Investment Company Act of 1940**

**and Section 302 of the Sarbanes-Oxley Act of 2002**

I, Jonathan Krane, certify that:

1. I have reviewed this report on Form N-CSR of the KraneShares Trust (the "Registrant");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information, included in this report fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's other certifying officer(s), if any, and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5. The Registrant's other certifying officer(s) and I have disclosed to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize, and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date: June 6, 2025

---

| |
|:---|
| /s/ Jonathan Krane |
| Jonathan Krane |
| Principal Executive Officer and Principal Financial Officer |

---

## Exhibit 99.906

**Exhibit 99.906 CERT**

**CERTIFICATION**

**Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906**

**of the Sarbanes-Oxley Act of 2002**

The undersigned, Jonathan Krane, the Principal Executive Officer and Principal Financial Officer of the KraneShares Trust (the "Fund"), with respect to the Fund's Form N-CSR for the period ended March 31, 2025, as filed with the Securities and Exchange Commission, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. such Form N-CSR fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. the information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Fund.

Dated: June 6, 2025

---

| |
|:---|
| /s/ Jonathan Krane |
| Jonathan Krane |
| Principal Executive Officer and |
| Principal Financial Officer |

---