Today, while reading an article on cleantech ETFs by The Motley Fool, I found out that XShares Advisors LLC and the Chicago Climate Exchange were working on a carbon emissions-based ETF (PDF document). There is not a lot of info available on what exactly this ETF will track. We reported back in November that UBS had launched an index based on European carbon prices. As noted by Richard Kang at around the same time, this index is well-suited for something like an ETF. If any of our readers have any further insight on this, don’t hesitate to share it with the rest of us.
Charles
I have no more insight than you into this proposed ETF. It would appear as though it may be based solely on CCX CO2 prices. After all, why reinvent the European ETF?
The exchange has been very tight-lipped about the press release, as has XShares LLC.
We shall have to wait to see.
This ETF will probably track the carbon credits US companies will be trading with each other; ethanol producers trading with DuPont chemical plants perhaps? Any thoughts?
You are right, Mike, in all likelihood this will track some sort of a CCX price index rather than a basket of companies with “climate-friendly” characteristics.
Of course if they can get this thing out before the US moves ahead at the Federal level on greenhouse gases, early buyers could do well. The contract for 100 metric tons of carbon (aka CCX CFI) trades at around USD 3.60 on the CCX right now, while the Dec. 08 contract for one ton of carbon on the ECX is at around EUR 16.45…so there’s plenty of room to grow.
Let’s wait and see.