CICC Hong Kong Asset Management launches the First Carbon Futures ETF in Greater China

2022-03-23Corporate News

Hong Kong, 23 March 2022 - China International Capital Corporation Hong Kong Asset Management Limited ("CICC HKAM"), a wholly owned subsidiary of China International Capital Corporation Limited ("CICC"), announced today the launch of the CICC Carbon Futures ETF (the "ETF"), the first of its kind in Greater China. Units of the ETF will begin trading today on the Stock Exchange of Hong Kong ("SEHK") under the ticker 3060 for HKD counter, 83060 for RMB counter and 9060 for USD counter.

The ETF invests in the most liquid and most representative ICE EUA Futures Contracts by tracking the ICE EUA Carbon Futures Index (Excess Return)[1], which measures the performance of a long-only basket of EUA Contracts. Each European Union Allowance ("EUA") is an entitlement to emit one metric tonne of carbon dioxide equivalent gas under the European Union Emissions Trading System ("EU ETS"). 

Established in 2005, the EU ETS is the world's largest carbon market. EUA notional traded in 2021 was 683 billion EUR[2], accounting for around 90%[2] of the global emission trading that year. The EU ETS works on a "cap and trade" principle, where a cap is set on the amount of greenhouse gases ("GHG") that can be released into the atmosphere. The EU ETS is a cornerstone of the European Union's ("EU") climate policy, and it contributed to the EU's reduction of GHG emissions by 31%[3]  from 1990 to 2020. The new ETF allows investors to participate in the carbon market efficiently in the Asia-Pacific time zone.

"This ETF highlights our commitment to the development of climate-themed products[4] and our overall capabilities in structuring innovative investment solutions," said Ning Lin, Managing Director at CICC HKAM. "This new ETF will allow investors to access one of the largest, most liquid and most actively traded carbon markets in the world. Better still, as the carbon market exhibits low correlation with other assets, it is an excellent choice to deliver portfolio diversification."

The launch of the ETF marks another milestone for CICC HKAM, which provides a wide range of asset management products and services for investors. It is the fifth ETF under its unit trust CICC Fund Series. The other Hong Kong listed ETFs under the CICC Fund Series are CICC CSI Select 100 ETF (a China A-shares ETF under the ticker 3093 for HKD counter and 83093 for RMB counter), CICC Bloomberg China Treasury 1-10 Years ETF (a China government bond ETF under the ticker 3079 for HKD counter and 83079 for RMB counter), ICBC CICC USD Money Market ETF (a USD money market ETF under the ticker 3011 for HKD counter and 9011 for USD counter) and CICC HKD Money Market ETF (a HKD money market ETF under the ticker 3071). 

 

[1] "Excess Return" does not mean any additional return on the ETF's performance.

[2] Data source: Refinitiv. As of January 2022. See https://www.refinitiv.com/content/dam/marketing/en_us/documents/gated/reports/carbon-market-year-in-review-2022.pdf

[3] Data Source: European Commission. See https://ec.europa.eu/clima/system/files/2021-10/com_2021_962_en.pdf 

[4] The CICC Carbon Futures ETF has not been authorised by the Securities and Futures Commission of Hong Kong as an ESG fund. 

 
About China International Capital Corporation Hong Kong Asset Management Limited:
China International Capital Corporation Hong Kong Asset Management Limited (“CICC HKAM”) was established in 2005 in Hong Kong as a wholly owned subsidiary of China International Capital Corporation Limited (“CICC”), a leading Chinese investment bank.  CICC HKAM is licensed by the Securities and Futures Commission (“SFC”) to carry out Type 4 (Advising on Securities) and Type 9 (Asset Management) regulated activities.  
CICC HKAM provides full-range asset management products and investment solutions, including SFC-authorized funds, ETFs, non-SFC authorized funds, as well as discretionary account management.  CICC HKAM’s capabilities cover major asset classes, including fixed income, equities, commodities as well as quantitative strategies.  CICC HKAM also manages one of the largest* QFII (“Qualified Foreign Institutional Investors”) schemes.
Adhering to CICC’s core value of “Chinese roots and international reach”, CICC HKAM is committed to serving investors with the best-in-class asset management products and investment solutions.
*Source: State Administration of Foreign Exchange, as of 31 May 2020

 
Disclaimer:
This document is issued by China International Capital Corporation Hong Kong Asset Management Limited (“CICCHKAM”) and has not been reviewed by the Securities and Futures Commission of Hong Kong. This document is provided for information purposes only. Nothing contained herein constitutes investment advice or invitation for investment, or should be relied on as such. 
Although the information provided in this document has been obtained from sources which CICCHKAM believes to be reliable, it does not guarantee the accuracy of such information and such information may be incomplete or condensed.
Please refer to the offering documents for the index provider disclaimers.

Important Risk Warnings:
The CICC Carbon Futures ETF is a futures-based exchange traded fund which is subject to risks associated with derivatives and is different from conventional exchange traded funds. The ICE EUA Carbon Futures Index consists of only ICE EUA Futures Contracts whose price movements may deviate significantly from the spot price of EUA. The ETF does not seek to deliver a return of the spot price of EUA.
An investment in the ETF involves risks which include without limitation to carbon emissions allowance market risks, futures contracts risks, risk of material non-correlation with spot/current market price of EUA, concentration / single commodity risk and new index risk. Movement in the prices of futures may be highly volatile. It is possible that the entire value of your investment could be lost. Please note that the aforementioned investment risks are not exhaustive. Investors should not base on this document alone to make investment decisions, but should read the prospectus of the ETF in detail (including the product features and risk factors).