CO2 - Carbon Fund units

[gbogo]

Anyone looking at these? My understanding is that the fund issues new units each week and backs them by actually purchasing carbon units on the open market. So the CO2 roughly reflects the spot Carbon price in NZ (approx $48 at the moment). Seems to me that a 40%+ increase is almost guaranteed within the next 6-9 months.... (or maybe I've misunderstood everything..)

Shaw Says No Wiggle Room As Carbon Price Nears Cap | Newsroom

"The Climate Change Commission had previously recommended that the ETS settings be adjusted as soon as possible to allow for a much higher carbon price. The cap would rise to $70 from 2022, in the commission's outline, and then jump "at least" 10 percent plus inflation each year thereafter."

[Beagle]

Anyone looking at these? My understanding is that the fund issues new units each week and backs them by actually purchasing carbon units on the open market. So the CO2 roughly reflects the spot Carbon price in NZ (approx $48 at the moment). Seems to me that a 40%+ increase is almost guaranteed within the next 6-9 months.... (or maybe I've misunderstood everything..)

Shaw Says No Wiggle Room As Carbon Price Nears Cap | Newsroom

"The Climate Change Commission had previously recommended that the ETS settings be adjusted as soon as possible to allow for a much higher carbon price. The cap would rise to $70 from 2022, in the commission's outline, and then jump "at least" 10 percent plus inflation each year thereafter."

Former well respected poster Moose brought these to my attention a couple of weeks back. Don't look too shabby but its a real minnow in terms of market cap and the price of carbon has enjoyed a VERY strong run in recent weeks. I am sitting on my paws and seeing what happens with this one, (AKA doing a possum struck in the headlights).

[gbogo]

Thanks Big dog. The market cap seems less relevant here because my understanding is that the fund just buys as much carbon as is needed to back as many units as are bought. In terms of exiting a position, I believe that institutional players would prevent any significant arb opening up. Disc: I am long but looking at buying significantly more.

[Beagle]

Where I got too was I am hoping one day all this carbon madness will end but alas, I am pretty sure it won't so I suppose one day I should get some as a hedge against the ever increasing level's of eco madness that invade our lives.

[JeffW]

I'm not quite sure of the point of it. Anyone can open an ETS Account and trade carbon units without the overhead of the fund structure

[haewai]

I'm not quite sure of the point of it. Anyone can open an ETS Account and trade carbon units without the overhead of the fund structure

You'll find the other market ways of buying and selling units have higher transaction costs, especially in small parcels. Cheapest would be to buy NZX:CO2 via Sharseies. But yes anyone in NZ can open an account at https://www.eur.govt.nz/

[STr]

Sharesies sells NZX:CO2?

[tommy_d]

I'm not quite sure of the point of it. Anyone can open an ETS Account and trade carbon units without the overhead of the fund structure

try buying or selling unit blocks of less than 1,000 units and see how that goes for you...
There have been posts on here about this fund before, not sure where - e.g. someone highlighting the carbon match emails, that sort of thing

[GTM 3442]

I bought some of these last week, so I imagine that the price has now peaked for a while.

Why these and why now?

Carbon is currently fashionable, and won't be going away any time soon.
Carbon is becoming embedded in the global economic order - https://www.economist.com/finance-an...n-some-imports
Salt aren't fools.

[Sideshow Bob]

Sharesies sells NZX:CO2?

Yes, can buy through Sharsies