The fund, with about $8 billion under management and best-known for its bullish position on oil and gas, filed a final prospectus on Monday that outlines the details of its carbon credit ETF, tentatively set to launch Feb.
The carbon credit ETF adds further clarity to how Ninepoint views the energy transition: Its fund managers have been vocal about their beliefs that demand for fossil fuels such as oil will continue to increase for years, in concert with global population growth, and because it will take time to establish the infrastructure and supply chains to supply alternative energy sources.
Today, carbon trading systems exist in 38 countries, including an international system in Quebec and California.
A single credit generally allows for the emission of one megaton of carbon dioxide equivalent — roughly what is emitted by driving from Vancouver to Toronto, according to Ninepoint.
Wilson said that Ninepoint’s ETF will initially use investor funds to purchase future contracts on carbon credits in the three most liquid emissions trading systems, based in the European Union, the shared Quebec and California market, and the collaboration between 11 U.S.
The ETF will allocate its investor funds equally among the three markets, and rebalance at the end of every month.
Wilson said carbon credits are not correlated to other assets and allow investors to diversify their portfolio.
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