South Korea’s Samsung Asset Management has launched the country’s first carbon-based exchange-traded fund, a futures ETF that uses an index compiled by Atlanta-based International Exchange, Inc as the benchmark.
The ICE EUA Carbon Futures Index tracks the performance of a long-only basket of European Emission Allowance contracts traded on the Intercontinental Exchange, a platform for energy and commodity derivatives.
The exchange has licensed the benchmark to Samsung for its KODEX Europe Carbon Allowance Futures ICE (H) ETF.
“The new ETF is designed to allow Korean and global investors to participate in carbon futures markets more efficiently,” Intercontinental Exchange says in a statement on September 30, when the fund was launched.
The futures index tracks the carbon market under the European Union’s Emissions Trading System, one of the world’s most actively traded carbon markets, representing some of the largest economies, according to Jaehun Jeong, a portfolio manager at Samsung.
“As market participants continue to pay increasing attention to the energy transition and climate risk, this ETF will provide greater hedging and trading opportunities for retail and institutional investors,” he says in the statement.
Seoul-based Samsung Asset Management had 275 trillion won (US$231 billion) of assets under management at the end of 2020.
Intercontinental Exchange provides performance benchmarks for over $1 trillion of assets managed by investors globally.