Carbon futures ETF makes its debut

An exchange-traded fund tied to carbon futures began trading in Hong Kong yesterday, the first of its kind in the financial hub, Hong Kong Exchanges and Clearing (0388) said.

Managed by a subsidiary of China International Capital Corporation, the new ETF under the ticker 3060, tracks the ICE EUA Carbon Futures Index, which measures the performance of a long-only basket of European Union Allowance futures contracts. The ETF closed 2.6 percent higher yesterday.

The market capitalization of ETFs related to environmental, social and governance investing increased 84 percent last year to HK$4.5 billion by year-end, while their average daily turnover registered HK$40.9 million in 2021, more than double that of 2020, HKEX said.

As of February 2022, 157 ETFs were listed on the HKEX with a market capitalization of HK$423.5 billion, it noted.

Trading in the ETF market has been strong year to date, with average daily turnover up 15 percent to HK$8.9 billion in the first two months of 2022 from HK$7.7 billion in the full year of 2021.