KB Securities, Launches New 'KB S&P Europe Carbon Emission Allowance Futures ETN(H)'

[Asia Economy Reporter Kwon Jaehee] KB Securities announced on the 6th that it will newly list the 'KB S&P European Carbon Emission Allowances Futures ETN(H),' which invests in European carbon emission allowances futures listed on the global exchange ICE (Intercontinental Exchange), on April 7.

The EU's carbon emission trading system is a key policy tool to reduce greenhouse gas emissions by 55% compared to the 1990s by 2030 and to achieve carbon neutrality by 2050. Since 2005, the EU has been reducing greenhouse gas allowances, and companies must purchase carbon emission allowances through auctions to offset emissions exceeding the permitted amount. The European carbon emission allowances market has attracted significant interest, to the extent that a futures market has been established.

Accordingly, KB Securities launched the 'KB S&P European Carbon Emission Allowances Futures ETN(H),' which tracks the S&P GSCI Carbon Emission Allowances (EUA) (EUR) ER index reflecting the daily movements of European carbon emission allowances futures.

The 'KB S&P European Carbon Emission Allowances Futures ETN(H)' is a currency-hedged product linked only to the fluctuations of the underlying index, so additional gains or losses due to KRW/EUR exchange rate fluctuations do not need to be considered.

In particular, the total fee is 0.26% per annum, which is prorated daily and reflected in the final indicative value (IV). Operating and hedging costs are kept low within the fee, resulting in lower costs compared to existing ETNs tracking the same index.

This product has a maturity of 5 years and can be traded until April 1, 2027, after which it will be delisted. The issuance volume is 1 million shares, and from the 5th to the 9th business day of December each year, constituent replacements are conducted over 5 business days. The existing European carbon emission allowances futures are replaced daily by 20% with the next December maturity futures.

Kim Hoyoung, Head of Equity Operations at KB Securities, said, "The global carbon emission allowances market is expected to rise as the world builds a low-carbon economy, and the domestic carbon emission allowances market is also gradually expanding. We plan to continue launching various products in line with changing trends."

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