Alternative Investments/ESG: A New ETF From Global X Invests In Carbon Credits

The new Global X ETF provides exposure to carbon allowance futures across four geographies.

New York-based Global X ETFs has introduced its latest thematic-based fund, the Global X Carbon Credits Strategy ETF (NTRL). This exchange-traded fund invests in carbon credit or allowance futures across various regions and aims to capitalize on the growing importance of decarbonization in addressing climate change. Carbon credits are tradable permits issued by governments that grant the holder the right to emit one unit of emissions per credit, typically equating to one ton of carbon dioxide. Under cap-and-trade programs, companies can exchange these credits to meet their emission limits.

The NTRL fund seeks to provide exposure to carbon allowance futures in four geographies: Europe, the United Kingdom, California, and the Northeast United States. By investing in the ICE Global Carbon Futures Index, the ETF aims to reflect the performance of carbon credit prices. Pedro Palandrani, Director of Research at Global X ETFs, highlights the increasing pressure to meet emissions reduction commitments aligned with the Paris Agreement and the potential for regulators to tighten emissions caps, potentially leading to increased scarcity and prices of carbon allowances.

Global X ETFs, which has over $39 billion in assets under management, offers a wide range of ETF strategies, including thematic growth, income, commodity, and international access funds. The company’s expertise in thematic investing enables it to provide investors with exposure to potential price increases in carbon allowances while diversifying their portfolios. With an expense ratio of 0.39%, the NTRL ETF aims to deliver investment results corresponding to the performance of the ICE Global Carbon Futures Index.

Global X ETFs is a member of Mirae Asset Financial Group, a global leader in financial services with over $520 billion in assets under management worldwide. Mirae Asset’s extensive ETF platform operates across multiple countries, managing over $80 billion in assets.

Related Story: VanEck Australia Launches Global Carbon Credits ETF

Photo by Jacek Dylag on Unsplash

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