Rethinking Alternatives: The Case for Carbon in 2026
Wednesday, February 4, 2026 10:00 am - 11:00 am EST
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Event Details:
Rethinking Alternatives: The Case for Carbon in 2026 Wednesday, February 4, 2026 10:00 am - 11:00 am EST
What has outperformed U.S. equities over the past five years, done so again in 2025,1 and is structurally designed to see continued growth against the backdrop of concerns about the U.S. economy, increasing discussions around de-dollarization, and Europe’s accelerating reindustrialization trend?2
Compliance carbon allowances—standardized, regulated, and increasingly liquid markets that together trade close to a trillion dollars annually3—continue to show their staying power within portfolios as investors seek diversification* through an asset class that has historically delivered competitive, uncorrelated returns relative to U.S. equities.4 Looking ahead to 2026, European Union allowances (EUAs), in particular, face potential supply tightening under the EU’s established emissions trading system,5 which is structurally designed with annually declining caps on supply across several sectors of the economy.
We believe that with U.S. equity valuations potentially stretched and rate uncertainty in fixed income, investors may benefit from rethinking alternative allocations, where carbon offers a differentiated return profile. In this session, KraneShares Head of Strategy, Luke Oliver, and Partner at CLIFI, Mark Lewis, will discuss:
- A review of recent carbon performance and future outlook
- What is driving the structural deficits in the European market
- The latest on California’s regulatory developments and future timeline
- How the KraneShares Global Carbon Strategy ETF (Ticker: KRBN) fits within a portfolio and is an impactful part of an alternative allocation
Investors can submit questions by emailing [email protected]
1 CFP/CIMA Credit Available
The views expressed are the speakers’ opinions as of the date of publication and may change without notice. Nothing herein should be interpreted as a forecast or guarantee of future events.
For KRBN standard performance, top 10 holdings, risks, and other fund information, please click here.
For KCCA standard performance, top 10 holdings, risks, and other fund information, please click here.
For KEUA standard performance, top 10 holdings, risks, and other fund information, please click here.
*Diversification does not ensure a profit or guarantee against a loss. KRBN, KCCA, and KEUA are non-diversified funds. The statement regarding diversification refers to sector exposure, not regulatory diversification under the Investment Company Act of 1940.
Citations:
- Data from Bloomberg as of 12/31/2025 based on a 5-year return of +102.2% and +22.0% in 2025 for the S&P Global Carbon Credit Index; US equities refer to the S&P 500 Index, with a 5-year return of +96.0% and 2025 return of +17.9%. The S&P Global Carbon Credit Index tracks the most liquid segment of the tradable carbon credit futures markets, including futures contracts on European Union Allowances, U.K. Allowances, California Carbon Allowances, the Regional Greenhouse Gas Initiative (RGGI), and Washington Carbon Allowances (WCA), with pricing data from ICE Futures Pricing. The S&P 500 Index is a stock market index tracking the stock performance of 500 leading companies listed on stock exchanges in the United States. Past performance does not guarantee future results.
- Center on Budget and Policy Priorities, “A Weakening Economy, and a Drastically Cut Economic Support System,” November 5, 2025.
- Data from Bloomberg as of 12/31/2025.The five largest markets collectively traded over $900 billion in 2025.
- Data from Bloomberg based on a 0.3 correlation between the S&P Global Carbon Credit Index and the S&P 500 Index (i.e., US Equities) as of 7/30/2020 (KRBN inception) to 12/31/2025. Past performance does not guarantee future results.
- ING, “Falling allowance supply to tighten EU carbon market,” December 8, 2025.
By Oktay Kurbanov, Partner at Climate Finance Partners
