Publicly Traded Carbon Investments Down

Posted on March 2, 2009

Seeking Alpha takes a look at the recent performance of some investments that track different ways to play carbon trading. You’d think with all the carbon cap and trade talk from the Obama administration would have provided a bit of a boost. It didnt. It looks like investors still care about fundamentals, which we know is not good in the carbon credits space.

The Global Carbon Trading Index has lost about 15% of its market value in the past five weeks to a level of 18,497. Initial enthusiasm for the space (with the election of President Obama) has faded given the realities of a global economic slowdown and bear market for stocks.

With the launch of AirShares Carbon Fund (ASO) in mid-December, investors have another option to trade the price of carbon with the iPath Global Carbon ETN (GRN) (an exchange-traded note which is a debt obligation of Barclays) already on the market since last summer.

ASO has lost about 40% of its value since it was launched by XShares on 12/15/08, with about 200,000 shares outstanding, $3M in net assets, and an average trading volume measured in hundreds. GRN has lost more than half of its value since launching last summer, with 100,000 shares outstanding, $1.8M net assets, and an average volume of less than 2,000 shares per day.

Source: Seeking Alpha