KraneShares Global Carbon ETF (KRBN)

Date: 2022

Asset Class: Public Equity - ETF

Description:  KRBN is the first US-listed ETF to provide access to the regulated (mandatory as opposed to voluntary) carbon allowances futures market. The fund tracks the IHS Markit’s Global Carbon Index, which offers broad coverage of cap-and-trade carbon allowances by tracking the most traded carbon credit futures contracts. The index introduces a new measure for hedging risk and going long the price of carbon while supporting responsible investing.

Why We Invest: Putting a price on carbon efficiently accelerates the transition to a carbon-free economy. Investing in KRBN supports the cap-and-trade approach and empowers the voice of KraneShares to advocate for a more rapid contraction of carbon allowances. Financially, it is attractive to have a publicly traded asset with low correlation to public equities and debt, especially in our recent uncertain economic times. Most investors agree that the carbon price will rise over time because a higher price better reflects carbon’s true cost. Furthermore, carbon allowances, which represent supply, are going down each year while commitments to offset carbon are increasing.