Global X unveils low-fee carbon ETF

Yasmine Raso

Senior Journalist, Financial Newswire

15 December 2022

The fourth exchange traded fund (ETF) launch since its rebrand, Global X has unveiled a Global Carbon ETF (GCO2) offering a low-fee fund that also supports local net-zero initiatives.

The fund is currently the lowest-cost carbon ETF in Australia with a management fee of 0.45 per cent per annum and will also support the Yarra Yarra Biodiversity Corridor ‘Plant-a-Tree’ program by donating 10 per cent of the fees to its objective of “reconnecting coastal regions with drier inland habitats”.

GCO2 tracks the ICE Global Carbon Futures Index to provide investors with access to global carbon markets including the European Union Emissions Trading Scheme, Regional Greenhouse Gas Initiative, Western Climate Initiative (California cap and trade program) and the UK Emissions Trading Scheme.

“We are witnessing a watershed moment as investors seek out climate-focused investment opportunities, but do not want to compromise on potential returns. GCO2 is an innovative way to leverage the global transition to net-zero, which has significant tailwinds, thanks to government backed climate change targets,” Global X Head of Investment Strategy, Blair Hannon, said.

“Carbon emissions are front of mind for governments and the public alike, so as global decarbonisation and clean energy initiatives become more ambitious, demand for carbon allowances will likely increase – which we expect to push up the price of carbon over the medium to long term.”

Donations to the ‘Plant-a-Tree’ program will see trees planted in Western Australia’s wheatbelt region which is one of 36 biodiversity hubs in the world.

“Global X is supporting the Yarra Yarra Biodiversity Corridor ‘Plant-a-Tree’ program because we understand how important climate-related issues are for investors and this is our way of acknowledging the fight against climate change is a community effort,” Hannon said.

GCO2 joins 26 other ETFs that are part of Global X’s suite of “future-focused” products, accounting for almost $5 billion in assets under management in Australia.