Carbon New Deal ETF Shows Strong Initial Returns

[Asia Economy Reporter Junho Hwang] The Carbon Efficiency Green New Deal ETF, a representative ESG (Environmental, Social, Governance) exchange-traded fund aligned with the government's carbon zero policy, recorded a return of over 2% just two months after its launch.

According to the asset management industry on the 27th, the average return of the four Carbon New Deal ETFs launched on February 4 was 2.01%. The net assets were recorded at 167.3 billion KRW.

This ETF is an ESG product that tracks an index investing in low-carbon companies. It fully replicates the KRX/S&P Carbon Efficiency Green New Deal Index. This index has been jointly calculated with the global index provider Standard & Poor's (S&P) DJI since November last year, following the government's Green New Deal activation policy. The index assigns higher weights to companies with lower carbon emissions relative to their sales within the same industry group. Most of the companies included are large corporations such as Samsung Electronics, LG Chem, and SK Hynix. The index's return from February 4 to the present is approximately 3.18%. During the same period, the KOSPI 200 return was recorded at 3.36%.

An industry official said, "Since the government announced the 2050 carbon neutrality strategy at the end of last year, it seems to have performed well despite the lack of significant results."

However, although the ETFs track the same index, returns varied somewhat by asset management company. Samsung Asset Management (net assets 51.4 billion KRW) and Mirae Asset Global Investments (98.9 billion KRW) recorded returns in the 2% range, while Hanwha Asset Management (7.7 billion KRW) and NH-Amundi Asset Management (9.2 billion KRW) had returns in the 1% range.

An asset management industry official analyzed, "Although these ETFs track the same index, differences in rebalancing, managed funds, total expense ratio, and tracking error appear to have caused these discrepancies."

This content was produced with the assistance of AI translation services.