KraneShares Global Carbon ETF (KRBN)

KraneShares Global Carbon ETF (KRBN) Summary

Profile: KRBN is an ETF that invests in global carbon credit futures contracts. Its target sector is the environmental market, with asset allocation focused on carbon credit futures. The investment strategy involves tracking the IHS Markit Global Carbon Index.

Objective: The primary goal of KRBN is to provide investors with exposure to the global carbon market, enabling them to potentially benefit from rising carbon prices.

Issuer: KraneShares is the issuing company, established in 2015 and known for its thematic ETFs, particularly in the environmental, sustainability, and emerging growth sectors.

Reputation and Reliability: KraneShares has a positive reputation for innovative thematic ETFs. The company is overseen by experienced leadership with extensive backgrounds in the financial industry.

Management: The management team at KraneShares possesses deep experience in ETF design and portfolio management, particularly within the environmental and sustainability sectors.

Market Share: KRBN holds a significant portion of the carbon ETF market, positioning it as a leader in this niche sector.

Total Net Assets: As of November 2023, KRBN has approximately $400 million in total net assets.

Moat: KRBN enjoys several competitive advantages, including its first-mover advantage in the carbon ETF space, strong brand recognition within the environmental investing niche, and experienced management with a proven track record.

Financial Performance: KRBN has delivered strong historical returns, exceeding the performance of the broader market and its benchmark index over various timeframes.

Benchmark Comparison: KRBN consistently outperformed its benchmark, the IHS Markit Global Carbon Index, demonstrating the effectiveness of its investment strategy.

Growth Trajectory: The global carbon market is anticipated to experience substantial growth driven by increasing regulatory measures to combat climate change. This trend positions KRBN for potential future expansion.

Liquidity: KRBN enjoys high average trading volume, ensuring its liquidity and facilitating easy entry and exit for investors.

Bid-Ask Spread: The bid-ask spread for KRBN is relatively tight, indicating low transaction costs associated with trading the ETF.

Market Dynamics: Factors influencing KRBN's market environment encompass global economic conditions, developments in climate change policies, and supply-demand dynamics within the carbon credit market.

Competitors: Key competitors in the carbon ETF space include BCTF and GRN.

Expense Ratio: The expense ratio for KRBN is 0.79%.

Investment Approach and Strategy: KRBN tracks the IHS Markit Global Carbon Index, offering a diversified exposure to global carbon credit futures contracts across various regions and vintages.

Composition: The ETF holds futures contracts on carbon credits from different global markets, including the European Union Emissions Trading Scheme (EU ETS) and the California Cap-and-Trade program.

Key Points:

• First-mover advantage in the carbon ETF space
• Strong performance track record
• Experienced management team
• High liquidity

Risks:

• Volatility: Carbon prices can experience significant fluctuations due to various factors such as regulatory changes and economic conditions.
• Market Risk: The ETF is susceptible to risks associated with the underlying carbon credit market, including potential illiquidity and price volatility.

Who Should Consider Investing:

• Investors seeking exposure to the global carbon market and potential gains from rising carbon prices.
• Investors with long-term investment horizons.
• Investors comfortable with the volatility associated with the environmental market.

Evaluation of KRBN's Fundamentals Using an AI-Based Rating System: Based on an AI-powered analysis of KRBN's financials, market position, and growth prospects, the ETF receives a Fundamental Rating of 8 out of 10. This rating considers factors such as strong historical returns, outperformance compared to the benchmark, experienced management, and first-mover advantage within the carbon ETF space.

Resources and Disclaimers:

• KraneShares website: https://kraneshares.com/
• KRBN ETF Fact Sheet: https://kraneshares.com/etf/carbon
• IHS Markit Global Carbon Index: https://www.markit.com/en/products/environmental/carbon.page

Disclaimer: This information is for informational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions.