Alternative Investments/ESG: New ETF For Exposure To Global Compliance Carbon Markets

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The Carbon Strategy ETF (NYSE: KARB) is an actively managed thematic ETF.

Carbon Fund Advisors has launched the Carbon Strategy ETF (NYSE:KARB) designed for investors to obtain exposure to the global compliance carbon markets that comprise emissions trading systems established by various authorities for deriving a price on greenhouse gas emissions. These markets have surged from $ 220 billion in $ 2018 to $ 899 billion in 2021.

According to Tim Collins, a founder and President of Carbon Fund Advisors, emissions trading systems are an effective tool for governments across the globe to achieve climate targets. (Businesswire)

Carbon Strategy ETF (NYSE: KARB)

The new ETF references the Carbon Streaming BITA Compliance Index which tracks the performance of the compliance carbon markets through a series of carbon allowance futures contracts. The ETF will hold futures contracts for carbon allowances that are treated in high-volume carbon markets in Europe and North America. These include European Union Allowances, California Carbon Allowances, and the Regional Greenhouse Gas Initiative CO2 Allowances.

“Most investors do not have access to directly buy and sell carbon allowances in these systems, which is limited to those registered in an ETS,” continued Tim Collins. “While active futures markets can provide investors with exposure to certain compliance carbon markets, investing directly in carbon allowance futures contracts can be challenging because of the difficulties associated with gaining access to derivative markets.”

“The Carbon Strategy ETF is a potential solution for that issue because it opens the door to invest in a portfolio of carbon allowance futures at a time when global carbon prices are forecast to rise as the world aims to achieve the goals of the Paris Agreement.”

Related Story: TD Asset Management Debuts Carbon Credit ESG ETF

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