KRBN offers unique exposure to the global carbon credit market, providing portfolio diversification and a hedge against rising carbon costs for industrial assets. Key drivers for higher carbon prices include stricter EU emissions targets, US electricity demand growth, and tightening allowance supply across major markets. Despite recent price declines, I believe we've reached an inflection point, with economic recovery and policy tightening likely to drive carbon prices higher.
U.S. trade policy continues to wreak havoc on global markets, impacting a range of asset classes. Carbon allowances experienced drawdowns leading up to the rollback of country-specific tariffs, with uneven impacts to different regions.
Washington state's carbon market cleared a notable hurdle in November, receiving significant support from voters for its continuation. The KraneShares Global Carbon Strategy ETF (KRBN) now invests in Washington's regulated carbon allowance market, the only fund to do so.
| ARCA Exchange | US Country |
The company specializes in financial services with a focus on environmental sustainability. Through its strategic investment approaches, the firm aims to provide investors with exposure to the carbon credit market, particularly focusing on futures that necessitate physical delivery of emission allowances. These allowances are procured under various cap and trade systems designed to limit or reduce greenhouse gas emissions globally. By tracking an index that reflects the performance of a basket of liquid carbon credit futures, the company commits to offering investment solutions that not only aim for financial returns but also contribute to global efforts in combating climate change. Its portfolio is non-diversified, dedicating its efforts towards a highly specialized market segment.
The primary service provided is investment exposure to carbon credit futures. This involves managing a portfolio that closely mirrors the constituents of an index designed to reflect the performance of liquid carbon credit futures. These futures contracts are unique in that they require physical delivery of emission allowances, representing a legal right to emit a specific amount of carbon dioxide or other greenhouse gases. The aim is to provide investors with a means to benefit from the mechanics of cap and trade regimes while supporting environmentally sustainable initiatives.
This service focuses on investments related to emission allowances issued under cap and trade programs. Cap and trade systems are designed to reduce emissions by setting a limit (cap) on pollution and allowing businesses to trade (buy and sell) permits to emit CO2 and other greenhouse gases. The company's investment strategy involves buying futures that require the physical delivery of these allowances, offering a unique opportunity for investors to engage with and support environmental policies directly through their investments.