NEW YORK, Aug. 4, 2021 /PRNewswire/ -- Krane Funds Advisors, LLC, ("KraneShares") an asset management firm known for its global exchange-traded funds (ETFs) and innovative investment strategies, is pleased to announce that the KraneShares Global Carbon ETF (NYSE: KRBN) has surpassed $500 million in assets under management (AUM) within its first year of trading. KRBN is the largest publicly-listed carbon allowance ETF in the world.1 In addition, KRBN recorded a 77% return as of 7/30/21.1
"As KRBN reaches its one-year milestone, it has been one of the best-performing strategies since launch," said Jonathan Krane, CEO of KraneShares. "On top of KRBN's strong performance, investing in carbon allowances can directly reduce carbon emissions by making it more expensive for companies to pollute ? we believe this makes KRBN an attractive impact investment."
"Economists agree that the best way to reduce emissions and save our planet is through putting a price on carbon," said Eron Bloomgarden Co-Founder of Climate Finance partners, the non-discretionary subadvisors to KRBN. "We believe that in order for us to stave off the detrimental effects of climate change the price of carbon emissions needs to be higher."
One of the primary goals of the Paris Climate Agreement is to limit global average temperatures to no more than 1.5o Celsius above pre-industrial levels, a widely accepted threshold for averting global climate disaster. The Organization for Economic Co-operation and Development (OECD) sees a central estimate of $147 by 2030 to facilitate net zero emissions by 2050. Currently IHS Markit puts the global price of carbon at $33.85.2
Today, KRBN holds over 15,000 carbon futures contracts3, which represents over 15 million tons of carbon emissions. This is equivalent to the annual emissions of over three million passenger vehicles4 or more cars than there are in the entire state of Michigan.5As KRBN grows, its potential to benefit the environment increases.
Along with increasing prices for emissions, the global carbon markets are also expanding. The UK launched its own domestic Emission Trading System (ETS) at the end of May and China launched theirs in July.
"While the EU market is 15 years old now, we believe the global carbon markets are only just getting started," said Richmond Mayo-Smith, Founder at Climate Finance Partners. "Right now is a really exciting time to be an investor in carbon allowances. With KRBN we have democratized access to these historically inaccessible markets."
KRBN is benchmarked to IHS Markit's Global Carbon Index, which offers broad coverage of cap-and-trade carbon allowances by tracking the most liquid segment of the tradable carbon credit futures markets. The index introduces a new measure for hedging risk and going long the price of carbon while supporting responsible investing.6 Currently, the index covers the major European and North American cap-and-trade programs: European Union Allowances (EUA), California Carbon Allowances (CCA), and the Regional Greenhouse Gas Initiative (RGGI).
KRBN Performance History as of 7/30/2021:
Average Annualized %
Total annual fund operating expense: 0.79%. Inception date: 7/30/2020.
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investors shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. For performance data current to the most recent month end, please visit www.kraneshares.com.
High short-term performance of the fund is unusual, and investors should not expect such performance to be repeated.
Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.
Krane Funds Advisors, LLC is the investment manager for KraneShares ETFs. Our suite of China-focused ETFs provides investors with solutions to capture China's importance as an essential element of a well-designed investment portfolio. We strive to deliver innovative, first-to-market strategies developed based on our strong partnerships and deep knowledge of investing. We help investors stay up to date on global market trends and aim to provide meaningful diversification. Krane Funds Advisors, LLC, is a signatory of the United Nations-supported Principles for Responsible Investing (UN PRI). The firm is majority owned by China International Capital Corporation (CICC).
About Climate Finance Partners
Climate Finance Partners (CLIFI) serves as the non-discretionary subadvisor to KRBN. CLIFI delivers innovative climate finance solutions and investment products to address capital needs for emerging environmental challenges. CLIFI is led by a team of investment professionals with deep experience in the fields of traditional investment and environmental finance. The Advisory Board is Chaired by Nobel Laureate, Robert Engle.
1. Data from Bloomberg as of 7/30/2021
2. Data from IHS Markit as of 7/20/2021
3. Data from StoneXS as of 7/22/2021
4. Data from EPA.gov, Greenhouse Gas Equivalencies Calculator
5. Data from Statista, Number of Registered Automobiles in Michigan in 2016 by Type, retrieved 7/23/2021
6. IHS Markit, "A Global Price for Carbon Emissions", April 2020
Carefully consider the Funds' investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Funds' full and summary prospectus, which may be obtained by visiting www.kraneshares.com/krbn. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal. There can be no assurance that a Fund will achieve its stated objectives.
KRBN is subject to liquidity risk, meaning that certain investments may become difficult to purchase or sell at a reasonable time and price. If a transaction for these securities is large, it may not be possible to initiate which may cause the Fund to suffer losses.
KRBN relies on the existence of cap and trade regimes. There is no assurance that cap and trade regimes will continue to exist, or that they will prove to be an effective method of reduction in GHG emissions. Changes in U.S. law and related regulations may impact how the Fund operates, increase Fund costs and/or change the competitive landscape. Funds may underperform other similar funds that do not consider conscious company/ESG guidelines when making investment decisions.
KRBN invests through a subsidiary and is indirectly exposed to the risks associated with the respective Subsidiary's investments. Since the Subsidiary is organized under the law of the Cayman Islands and is not registered with the SEC under the Investment Company Act of 1940, as such the Fund will not receive all of the protections offered to shareholders of registered investment companies.
KRBN and its subsidiary will be considered commodity pools upon commencement of operations, and will be subject to regulation under the Commodity Exchange Act and CFTC rules. Commodity pools are subject to additional laws, regulations and enforcement policies, which may increase compliance costs and may affect the operations and performance of the Fund and the Subsidiary. Futures and other contracts may have to be liquidated at disadvantageous times or prices to prevent the Fund from exceeding any applicable position limits established by the CFTC.
The value of a commodity-linked derivative investment typically is based upon the price movements of a physical commodity and may be affected by changes in overall market movements, volatility of the Index, changes in interest rates, or factors affecting a particular industry or commodity.
Investments in non-U.S. instruments may involve risk of loss due to foreign currency fluctuations and political or economic instability. The Fund's assets are expected to be concentrated in an industry or group of industries to the extent that the Index concentrates in a particular industry or group of industries. KRBN is non-diversified.
Fund shares are bought and sold on an exchange at market price (not NAV) and are not individually redeemed from the Fund. However, shares may be redeemed at NAV directly by certain authorized broker-dealers (Authorized Participants) in very large creation/redemption units. The returns shown do not represent the returns you would receive if you traded shares at other times. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns. Beginning 12/23/2020, market price returns are based on the official closing price of an ETF share or, if the official closing price isn't available, the midpoint between the national best bid and national best offer ("NBBO") as of the time the ETF calculates the current NAV per share. Prior to that date, market price returns were based on the midpoint between the Bid and Ask price. NAVs are calculated using prices as of 4:00 PM Eastern Time.
The KraneShares ETFs are distributed by SEI Investments Distribution Company (SIDCO), which is not affiliated with Krane Funds Advisors, LLC, the Investment Adviser for the Fund, any sub-advisers for the Funds, or Bloomberg Index Services Limited.
SOURCE Krane Funds Advisors, LLC
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