New York-based investment advisory firm XShares Advisors has filed a registration statement with the US Securities and Exchange Commission to offer exchange-traded fund shares in the AirSh
New York-based investment advisory firm XShares Advisors has filed a registration statement with the US Securities and Exchange Commission to offer exchange-traded fund shares in the AirShares EU Carbon Allowances Fund, which will invest in futures on carbon emission allowances eligible for trading under the European Union Emissions Trading Scheme.
‘We are excited to be providing products based on carbon emission allowances,’ says XShares Advisors president Nat Wasserstein. ‘Emissions trading is one of the prime examples of using a market-based mechanism for environmental protection. This is consistent with our strategy to create innovative products for the investment community.’
According to the firm’s SEC registration statement, the initial public offering of the AirShares fund aims to raise up to USD250m in baskets of 100,000 shares at USD2.5m per basket. The shares will be traded on the New York Stock Exchange’s NYSE Arca online securities exchange.
The EU scheme is designed to enable countries to meet their obligations to reduce carbon dioxide emissions under the Kyoto agreement by allowing companies that do not use their full quota of emissions to sell unused allowances to firms that need to exceed their quota.
The AirShares fund seeks to reproduce the performance of the nearest December expiration exchange-traded futures contracts for carbon equivalent emissions allowances, beginning with contracts expiring in December 2008. The fund will not be leveraged and will hold long positions in futures contracts on carbon emission allowances.
According to Reuters, the fund will initially hold contracts developed by the European Climate Exchange and listed on ICE Futures on the electronic platform owned and operated by the Intercontinental Exchange. The proceeds from the IPO will be used to trade in futures contracts on carbon emission allowances and to track the value of those contracts.
XShares Advisors is a registered investment advisor that provides investment advisory services to exchange-traded funds and partners with major institutions and index providers to bring innovative ETFs to market using its administrative platform. The firm also creates and licenses intellectual property for its ETFs, developing products that allow for innovative trading strategies.