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KRBN

KraneShares Global Carbon Strategy ETF*

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Investment Strategy:

The KraneShares Global Carbon Strategy ETF (KRBN) is benchmarked to 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.

Currently, the index covers the major European and North American cap-and-trade programs: European Union Allowances (EUA), California Carbon Allowances (CCA), the Regional Greenhouse Gas Initiative (RGGI), and United Kingdom Allowances (UKA).

Global Carbon Allowance Market Highlights

  • According to IHS Markit, as of December 31, 2021 the global price of carbon was $51.45 per ton of CO2. It is estimated that carbon allowance prices need to reach $147 per ton of CO2 to meet a 1.5°C global warming limit1,2
  • As of December 2021, the four largest global carbon futures markets tracked by IHS Markit’s Global Carbon Index, had an annual trading volume of $683.9 billion.1
  • In April 2019, The Financial Times reported that European carbon allowances within the European Union Emissions Trading System were the world’s top-performing commodity over the past two years.3,4
  • In 2021, China launched its carbon allowance market, expected to be the largest in the world, projected to cover ~3.3 billion CO2.4

KRBN Features

  • Going long the price of carbon may support responsible investing and incentivize pollution reduction aligned with ESG investment goals.
  • Can provide potential portfolio diversification due to the global carbon futures markets’ historically low correlation to other asset classes.1
  • KRBN may be appropriate for investors who are concerned about the increase in cost of carbon emissions on their portfolios. As the cost of carbon emissions rise, KRBN typically benefits, while companies with heavy carbon footprints typically suffer.3
  • May be a beneficiary of tightening carbon emissions regulation worldwide.

*Formerly the KraneShares Global Carbon ETF

1. IHS Markit, 12/31/2021
2. Financial Times, “Global Carbon Pricing, Too Important to Leave to Governments”, Jul 7, 2021.
3. Financial Times, April 17, 2019 “Niche asset nears mainstream as investors warm to EU carbon market”
4. Environmental Defense Fund, “China’s National ETS Open for Business”, Jan 5, 2021; World Bank State of Carbon Markets, June 2019.

Fund Details

Data as of 08/08/2022
Ticker KRBN
Primary Exchange NYSE
CUSIP 500767678
ISIN US5007676787
Net Assets $1,045,885,853
Total Annual Fund Operating Expense 0.78%
Inception Date 7/30/2020
Distribution Frequency Annual

Daily Performance

Data as of 08/08/2022
Premium Discount Chart
NAV
Net Asset Value$47.01 
Daily Change 0.25%
Price
Market Price $46.91 
Daily Change -0.11%
30 Day Median Bid/Ask Spread
 
0.19%

The ETF’s 30 Day Median Bid-Ask Spread is calculated by identifying the ETF’s national best bid and national best offer ("NBBO") as of the end of each 10 second interval during each trading day of the last 30 calendar days and dividing the difference between each such bid and offer by the midpoint of the NBBO. The median of those values is identified and that value is expressed as a percentage rounded to the nearest hundredth.

Performance History

Distributions
Cumulative %
Data as of: 07/31/2022
Fund NAV Closing Price Index
1 Month -11.23% -10.54% -11.83%
3 Month -7.90% -7.09% -8.55%
6 Month -14.51% -15.50% -14.61%
Since Inception 122.09% 121.28% 119.78%
Avg Annualized %
Data as of month end: 07/31/2022
Fund NAV Closing Price Index
1 Year 25.58% 24.74% 25.05%
Since Inception 48.87% 48.59% 48.09%
Avg Annualized %
Data as of quarter end: 06/30/2022
Fund NAV Closing Price Index
1 Year 36.86% 33.74% 36.99%
Since Inception 61.20% 60.25% 60.89%
Growth of $10,000
Data as of 08/08/2022

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 investor's 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.

The Growth of $10,000 chart reflects an initial investment of $10,000 on the day prior to the selected time period and assumes reinvestment of dividends and capital gains. For the growth of $10,000 chart since inception, the initial investment of $10,000 is instead made on the inception date of the Fund. Fund expenses, including management fees and other expenses were deducted. The growth of a $10,000 investment in the fund is hypothetical and for illustration purposes only.

Carbon Allowance Futures

Data as of 08/08/2022
Name Identifier Position Current Exposure($) % NAV
European Union Allowance (EUA) 2022 Future MOZ22 Comdty 6,740 575,819,984 55.06%
California Carbon Allowance (CCA) Vintage 2022 Future CTIZ22 Comdty 8,410 261,466,900 25%
Regional Greenhouse Gas Initiative (RGGI) Vintage 2022 Future WQCZ22 Comdty 3,949 52,521,700 5.02%
California Carbon Allowance (CCA) Vintage 2023 Future LUDZ23 Comdty 1,580 52,266,400 5%
UK Allowance (UKA) 2022 Future UKEZ2 Comdty 531 52,202,050 4.99%
European Union Allowance (EUA) 2023 Future MOZ23 Comdty 591 51,942,936 4.97%
1,046,219,971 100%

Collateral and Currency Management

Data as of 08/08/2022
Name Identifier Position Current Exposure($) % NAV
Euro FX Futures ECU2 Curncy 4000 510,775,000 48.84%
USD Cash & Equivalents** USD 355,523,632 355,523,632 33.99%
EURO EUR 110,000,000 112,392,844 10.75%
BRITISH STERLING POUND GBP 45,000,000 54,535,539 5.21%
SCHWAB SHORT-TER SCHO 215,000 10,547,900 1.01%
1,043,774,915 100%

Holdings, carbon allowance futures, and collateral are subject to change.
**Includes USD cash deposits & cash in margin accounts ($866,298,632), and implied short USD exposure from Euro FX futures

Carbon Allowance Futures Breakdown

Data as of: 08/08/2022
EUA 2022 Future 55.1%
CCA 2022 Future 25.0%
RGGI 2022 Future 5.0%
CCA 2023 Future 5.0%
UKA 2022 Future 5.0%
EUA 2023 Future 5.0%

Currency Exposure
Breakdown

Data as of: 08/08/2022
EUR 59.6%
USD 35.0%
GBP 5.2%

Top 10 Holdings

Data as of 08/09/2022
Full Holdings .CSV
Rank Name % of Net Assets Ticker Identifier Type Shares Held Market Value($) Notional Value($)
1 Cash 63.78% Cash 685,564,895 685,564,895 0
2 EURO 18.58% Currency 195,397,601 199,754,241 0
3 EURO 10.46% Currency 110,000,000 112,452,591 0
4 BRITISH STERLING POUND 5.06% Currency 45,000,000 54,393,811 0
5 BRITISH STERLING POUND 1.14% Currency 10,140,360 12,257,174 0
6 SCHWAB SHORT-TER 0.98% SCHO US8085248628 Mutual Fund 215,000 10,539,300 0
7 CA CARBON ALLOW 21DEC22 0.00% CTIZ22 Future 8,410 0 271,222,500
8 CALCARBALLOWV2023 DEC23 0.00% LUDZ23 Future 1,580 0 54,273,000
9 ECX EMISSION DEC22 0.00% MOZ22 Future 6,740 0 592,081,497
10 ECX EMISSION DEC23 0.00% MOZ23 Future 591 0 53,427,381

Holdings are subject to change.