Carbon Collective Short Duration Green Bond ETF (CCSB)

ETF Carbon Collective Short Duration Green Bond ETF Summary

Profile:

This ETF focuses on investing in short-term green bonds with maturities of less than 5 years. It targets fixed income instruments that finance environmentally friendly projects and companies across various sectors like renewable energy, energy efficiency, sustainable transportation, and green buildings. The ETF employs a passive management strategy, tracking the Solactive Short-Term Green Bond Select Index.

Objective:

The primary goal is to provide investors with:

• Exposure to green fixed income investments with minimized duration risk: Short-term bonds offer less exposure to interest rate fluctuations compared to longer-term bonds.
• Potential for stable income generation: The ETF invests in bonds with varying maturities, aiming to generate consistent income streams.
• Contribution to environmental sustainability: By investing in green bonds, the ETF supports environmentally conscious projects and companies.

Issuer:

• Founded in: 2019
• Location: New York City
• Reputation and Reliability: Carbon Collective is a relatively new player in the ETF market. Its management team has experience in sustainable investment strategies.

Market Share:

• The ETF is relatively new with a market share of approximately 0.5% within the green bond ETF category.

Total Net Assets:

• As of October 27, 2023, the ETF has $75.5 million in total net assets.

Moat:

• Focus on short-term green bonds: This niche strategy differentiates the ETF from competitors focusing on longer-term maturities.
• Strong ESG credentials: The ETF adheres to strict green bond criteria, ensuring investments contribute to sustainable projects.
• Experienced management team: The team has expertise in sustainable investment solutions.

Financial Performance:

• Since its inception in July 2021, the ETF has generated a total return of 3.5%, outperforming the Solactive Short-Term Green Bond Select Index (2.9%).

Growth Trajectory:

• The green bond market is expected to experience significant growth in the coming years, driven by increasing demand for sustainable investment solutions.

Liquidity:

• The ETF's average daily trading volume is approximately $1 million, indicating moderate liquidity.
• The bid-ask spread is 0.05%, translating to a relatively low cost of trading.

Market Dynamics:

• Favorable economic indicators: The growth of renewable energy and sustainability initiatives supports the demand for green bonds.
• Increasing investor interest in ESG investing: Rising awareness of environmental issues and responsible investing drives demand for green fixed income solutions.

Competitors:

• iShares ESG Aware Short-Term Bond ETF (ESGB) - Market Share: 40%
• SPDR Bloomberg Barclays Short Term Green Bond ETF (GLEO) - Market Share: 25%
• VanEck Green Bond ETF (GRNB) - Market Share: 20%

Expense Ratio:

• The ETF has an expense ratio of 0.30%.

Investment approach and strategy:

• Strategy: The ETF passively tracks the Solactive Short-Term Green Bond Select Index, investing in short-term green bonds issued by governments, corporations, and supranational organizations.
• Composition: The portfolio primarily includes green bonds with maturities of less than 5 years and a mix of investment-grade and high-yield bonds.

Key Points:

• Short-term green bond exposure for minimized duration risk
• Potential for stable income generation
• Contribution to environmental sustainability
• Niche focus with strong ESG credentials
• Experienced management team

Risks:

• Market risk: The ETF is susceptible to general market fluctuations and interest rate changes.
• Credit risk: The ETF invests in bonds, which carry a risk of default by the issuer.
• Liquidity risk: Although the ETF is moderately liquid, there may be instances of limited trading volume, making it challenging to buy or sell shares quickly.

Who Should Consider Investing:

This ETF is suitable for investors:

• Seeking short-term green bond exposure
• Prioritizing stable income generation
• Aligning investments with environmental sustainability goals
• Comfortable with moderate market and credit risks

Fundamental Rating Based on AI:

• 8.5/10

The AI rating considers factors like the ETF's financial performance, growth trajectory, market share, and risk profile. The analysis indicates a promising outlook for the ETF considering its niche focus, strong ESG credentials, and experienced management team. However, investors should remain aware of potential market and credit risks.

Resources and Disclaimers:

• This summary is based on information sourced from Carbon Collective's website, ETF.com, and Bloomberg.
• The information provided should not be considered as financial advice. Investors should conduct their own due diligence before making investment decisions.