KraneShares has launched its first exchange traded commodity (ETC) with a strategy capturing global carbon emissions allowances.
The KraneShares Global Carbon Strategy ETC (KRBN) is listed on Borsa Italiana and Deutsche Börse with a total expense ratio (TER) of 0.78%.
KRBN tracks the S&P Global Carbon Credit index which captures tradable carbon credit futures markets – also known as cap-and-trade carbon allowances – and includes major European and North American cap-and-trade programs.
These include the European Union Allowances (EUA), California Carbon Allowances (CCA), United Kingdom Allowances (UKA), and the Regional Greenhouse Gas Initiative (RGGI), which covers the Northeast US Power Market.
Cap-and-trade carbon allowances are permits issued by governments to companies, setting a cap on the amount of carbon dioxide that can be emitted.
The index uses ICE futures pricing and is reweighted semi annually.
The launch marks the first European ETC to capture global carbon allowances, with three strategies capturing European Union Carbon Allowances (EUAs) - which include the UBS European Physical Carbon ETC (CO2E), HANetf SparkChange Physical Carbon EUA ETC (CO2P) and the WisdomTree Carbon ETP (CARP) – and one capturing California carbon allowances, the WisdomTree California Carbon ETP (WCCP).
Elsewhere, KraneShares closed its China healthcare and ESG leaders ETFs as the funds struggle to grow assets under management (AUM) since their launch.
The closures marked an addition to KraneShares shutting two other China ETFs due to low AUM, the KraneShares MSCI A 50 Connect UCITS ETF (KA50) and the KraneShares Bloomberg China Bond Inclusion UCITS ETF (KBND) on 24 May.
