KSET - Global X unveils a carbon credit strategy ETF

2023-05-25 13:01:20 ET

Global X bolstered its exchange traded fund lineup on Thursday with the addition of the Global X Carbon Credits Strategy ETF ( NYSEARCA: NTRL ).

NTRL aims to provide investors access to carbon futures across different geographical regions, with the aim of capping emissions in line with the 2015 Paris Agreement. NTRL takes long-term stances in futures contracts that involve the physical delivery of emission allowances issued under “cap and trade” regimes.

Global X highlighted that global expectations for more stringent emissions caps have driven demand for carbon allowances around the world. The ETF issuer noted that between 2018 and 2022, the total value of compliance carbon markets more than quadrupled, from $186B to $856B.

"The pressure to meet Paris Agreement-aligned emissions reduction commitments is intensifying, and regulators worldwide are looking to tighten emissions caps, potentially increasing the scarcity and price of carbon allowances." said Pedro Palandrani, Director of Research at Global X ETFs.

Additionally, NTRL comes with a 0.39% expense ratio.

NTRL will also find itself trading alongside other carbon credit focused ETFs such as the  KraneShares Global Carbon Strategy ETF ( KRBN ), KraneShares California Carbon Allowance Strategy ETF ( KCCA ), and the KraneShares Global Carbon Offset Strategy ETF ( KSET ).

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