KraneShares adds carbon-offset ETF

The product is the first to include the top carbon-offset futures markets into one fund, the firm says

KraneShares launched its latest ETF Thursday, a product that provides coverage of the voluntary carbon market.

The KraneShares Global Carbon Offset Strategy ETF tracks carbon-offset futures contracts, including nature-based global emission offsets and global emission offsets, which trade through the Chicago Mercantile Exchange, according to the firm. The ETF will add more offset markets “as they reach scale,” KraneShares said in the announcement.

The ETF is the first in the US “to combine the leading carbon offset futures markets into a single investable fund,” KraneShares CEO Jonathan Krane said in the announcement.

The ETF, which trades under the ticker KSET and charges total fees of 79 basis points, can also invest in carbon credits issued under cap-and-trade regimes, as well as instruments including options, swaps and other ETFs, according to the prospectus.

Climate Finance Partner, or CLIFI, is the ETF’s nondiscretionary subadvisor.

“Voluntary carbon markets are a vital tool in the fight against climate change and are increasingly viewed as a cornerstone in global efforts to achieve mid-century net-zero targets,” CLIFI cofounder Eron Bloomgarden said in the announcement. “Investors can feel confident that the offset credits behind KSET are generated from emission reduction activities that have been third-party verified by leading carbon offset registries.”