Carbon Credit Fund
Carbon Markets – An Essential Tool for Decarbonisation
The Fund will seek to outperform its benchmark by 2% p.a. net of fees over rolling 5-year periods. The Benchmark is comprised of five equally weighted carbon credit markets: EUAs, CCAs, NZUs and ACCUs. Off-benchmark allocations are also allowed. The Fund will be hedged into AUD.
Apostle acknowledges mitigating and minimizing climate change as a critical global economic challenge. As a first step on this journey, the climate targets set, as part of the Paris Agreement need to be met. It’s widely accepted that the most efficient manner for this to occur should include putting a price on carbon. Participating in carbon markets the Fund aims to strengthen liquidity and price transparency to ultimately assist in driving greater certainty for those investing in the abatement and sequestration of emissions.
WHY INVEST IN CARBON
Carbon markets can enhance your portfolio in a number of ways. The key benefits include:
Carbon markets have a strong outlook with high expected returns which are mandated by governments worldwide and control mechanism.
Hedging against inflation
Carbon prices are expected to be a leading indicator of inflation.
Hedging against climate risks
The climate crisis is creating an increasing cost of carbon. Carbon markets allow you to hedge this risk by purchasing carbon as an investment.
Your portfolio gains exposure to an alternative liquid asset that has a unique risk/return profile and low correlation with major asset classes.
Mitigating divestment risk
For portfolios with little to no exposure to fossil fuel energy. You can mitigate this risk by investing in carbon. It is expected to be increasingly correlated with gas and coal.
DRIVERS OF INVESTMENT OUTLOOK
Approximately 220 countries ratified the Paris Agreement in 2015. These governments of control the supply of carbon allowances in the market and use various price controls to ensure that carbon prices are rising at a rate that constantly reduces emissions.
Supply / Demand Trends
In line with government commitments, the operators of carbon markets set clear frameworks to reduce their carbon allowance issuance each year.
Essential Tool For Decarbonisation
- First introduced 25 years ago following the Kyoto Protocols in 1997
- Designed to be an economically viable mechanism for reducing carbon pollution in the atmosphere
- They form a liquid carbon price – which companies have to pay for each ton of carbon they emit
- Regulators use control mechanisms to increase this price over time, which disincentives emissions in line with their climate goals
- Each country operates its own mechanism but it is expected that carbon prices will converge over time to create a global cost of carbon
Register your Interest
Please note The Apostle Carbon Credit Fund is a wholesale Fund