[Request] KFA Global Carbon ETF (KRBN) - No KIID

KRBN is benchmarked to [IHS Markit’s Global Carbon Index] which offers broad coverage of cap-and-trade carbon allowances by tracking the most traded carbon credit futures contracts. The index introduces a new measure for hedging risk and going long the price of carbon while supporting responsible investing. Currently, the index covers the major European and North American cap-and-trade programs: European Union Allowances (EUA), California Carbon Allowances (CCA), and the Regional Greenhouse Gas Initiative (RGGI).

“The climate crisis threatens life itself. Just as COVID-19 demanded an early response, so do the threats of climate disaster. One of the most powerful ways the world can collaborate to reduce emissions is to move toward carbon pricing that puts basic, free-market economics to work.” said Former Secretary of State, John Kerry. John Kerry is the Chairman of the Climate Finance Partners Advisory Board (CLIFI), which is the sub-advisor to KRBN.

“A comprehensive global price for carbon emissions at a substantial level could encourage rapid shifts of resources to lower carbon technologies and incentivize research and development of carbon capture and clean energy,” said Nobel Prize-winning Economist, Robert Engle, also a member of CLIFI’s Advisory Board. “KRBN provides investors access to the carbon allowances futures market, which is vital to having the free market determine the price of CO2 pollution.”

According to IHS Markit, as of July 29, 2020, the global price of carbon was $19.77 per ton of CO2. It is estimated that carbon allowance prices need to reach a range of $50 – $100 per ton of CO2 to achieve the emissions reductions goals of The Paris Agreement.1 As the Financial Times reported, over the past two years European carbon allowances within the European Union Emissions Trading System were the world’s top-performing commodity.

If I’m not mistaken, this is a US listed ETF without a KIID so Freetrade are not able to offer this.

Excuse my ignorance but what is a KIID? Does this mean freetrade would not be able to add this ETF at any point in the future ?

Potentially post brexit the govt could change the rules maybe.

There’s a decent, understandable explanation here:

It’s a document which funds must publish if they target European investors explaining the fund’s goals, charges, and risk rating.

Thanks for your responses. Seems like a relatively easy solution which opens up the ETF to a larger market. Struggling to see why they wouldn’t do this?

Hi Freetrade team

It would be useful to have this ETF to track the price of carbon allowances, as they become more scarce with the renewable energy initiatives coming into play over the next few years. This could be traded via futures, but derivatives aren’t awfully retail friendly in the UK.