The Case for Carbon
Climate urgency and the regulatory response is driving significant capital into decarbonizing our global economy. However, it can be challenging to navigate the investment landscape to best capture the opportunities arising from the energy transition and protect against its risks. Investors are increasingly finding that Environmental Social Governance (ESG) metrics have limitations, or divesting from heavy carbon footprint companies that actually form a critical part of the economy is not an effective approach. Instead, investors can allocate to compliance carbon allowances to manage their growing exposure to these transition risks while adding value to their investment portfolios.
In this video, we delve into the ‘what, why, and how’ of investing in compliance carbon markets. We explain the mechanics behind carbon cap-and-trade programs and how they add value to a diversified* portfolio. From their historically strong performance and structural upside to their low correlation to major asset classes to their direct impact benefits, we believe carbon allowances are an essential portfolio component for investors looking to hedge the transition risks and capitalize on the market’s potential price appreciation. Investors can gain exposure to these markets through the KraneShares suite of carbon ETFs, including our flagship global carbon fund, the KraneShares Global Carbon Strategy ETF (Ticker: KRBN).
*Diversification does not ensure a profit or guarantee against a loss.
For KRBN standard performance, top 10 holdings, risks, and other fund information, please click here.