Krane Funds Advisors, LLC is an asset management firm known for its innovative investment strategies. The company announced that the KraneShares Global Carbon Offset Strategy ETF (Ticker: KSET) now tracks the S&P GSCI Global Voluntary Carbon Liquidity Weighted Index.
S&P GSCI Global Voluntary Carbon Liquidity Weighted Index is the first benchmark tracking the current performance of global voluntary carbon futures markets. Its constituents are liquidity-weighted tradeable voluntary carbon credit futures contracts.
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The Global Carbon Offset Strategy ETF of Krane Funds Advisors is the first US-Listed ETF to track the global voluntary carbon markets, complementary to the global carbon allowance markets tracked by KraneShares’ flagship global carbon ETF (KRBN).
The index tracks carbon offset futures contracts that include nature-based global emission offsets and global emission offsets. They can be traded through the CME Group, the world’s largest financial derivatives exchange.
“We’re excited that KraneShares has selected our S&P GSCI Global Voluntary Carbon Liquidity Weighted Index as the underlying benchmark for its exchange-traded fund… This new voluntary carbon futures index is a key addition to S&P DJI’s continued efforts to grow its suite of new and innovative thematic alternative indices for the commodities space,” said Fiona Boal, Head of Commodities and Real Assets at S&P Dow Jones Indices.
The carbon offset contracts are seen as a powerful tool in the global fight to tackle climate change. They can accelerate the green energy transition as they facilitate companies to make up for their emissions footprint.
Carbon offsets futures contracts can also provide a potential hedge for climate risk exposure, and diversification from traditional asset classes.