Exchange traded fund provider XShares Advisors has announced the launch of trading in the AirShares EU Carbon Allowances Fund.
Exchange traded fund provider XShares Advisors has announced the launch of trading in the AirShares EU Carbon Allowances Fund.
It is billed as the first US traded product that provides exposure to the fast growing carbon market by holding European Union Allowances (EUAs) futures contracts.
AirShares EU Carbon Allowances Fund is a commodity pool that seeks to provide investors with investment results generally corresponding, before payment of the fund’s expenses and liabilities, to the performance of a basket of exchange traded futures contracts of EUAs.
An EUA is an entitlement to emit one metric tonne of carbon dioxide equivalent that is transferable under the EU Greenhouse Gas Emissions Trading Scheme.
Although the fund is a commodity pool, it provides investors with the flexibility of intra-day trading and the ability, for example, to buy on margin or go short.
During the first nine months of 2008, the global carbon market grew 81 per cent to USD87bn and is on track to clear USD100bn by year end, according to New Carbon Finance research released October 2008.
The report also noted that the carbon market remains relatively insulated against the turbulence affecting other markets.
The EUA futures contracts the fund invests in will expire in December of years 2009 through 2012.
The fund is now listed on NYSE Arca.
