Alternative Investments/ESG: The CICC Carbon Futures ETF Launches Today In Hong Kong

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This is the first ETF of its kind in Greater China.

The China International Capital Corporation Hong Kong Asset Management Limited, a wholly owned subsidiary of China International Capital Corporation Limited, launches today the CICC Carbon Futures ETF on the Hong Kong Stock Exchange. Investors will therefore get access to one of the largest carbon markets in the world. (Yahoo Finance)

CICC Carbon Futures ETF

The ETF will track the ICE EUA Carbon Futures Index (Excess Return). The index measures the performance of a long-only basket of EUA Futures Contracts.

Accordingly, the ETF will take exposure to the most liquid and most representative ICE EUA Futures Contracts.

Each EUA (European Union Allowance) is an entitlement to emit one metric tonne of carbon dioxide equivalent gas under the European Union Emissions Trading System, or the EUETS.

In 2021, the notional trading value of EUAs on the EUETS was 683 billion EUR. This accounted for approximately 90% of the global trade in emissions during the year.

The EU ETS works on a “cap and trade” principle, where a cap is set on the amount of greenhouse gases that can be released into the atmosphere.

Fundspeak

This ETF highlights our commitment to the development of climate-themed products and our overall capabilities in structuring innovative investment solutions,” said Ning Lin, Managing Director at CICC HKAM. “This new ETF will allow investors to access one of the largest, most liquid and most actively traded carbon markets in the world. Better still, as the carbon market exhibits low correlation with other assets, it is an excellent choice to deliver portfolio diversification.”

Related Story: After Blockbuster KRBN, KraneShares Launches European and California Carbon ETFs

Image of Exchange Square, Hong Kong: Wikimedia Commons

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