TD Asset Management (TDAM) announced today the launch of TD Global Carbon Credit Index ETF, a new exchange-traded fund aimed at offering investors exposure to the global carbon credit market.
Demand for carbon offset projects that counteract the release of greenhouse gases, and related credits, is expected to increase significantly over the next several years, as companies and businesses increasingly launch net zero ambitions, and turn to offsets as a bridge to their own absolute emissions reduction efforts, or to balance difficult to avoid emissions.
The new ETF aims to track the Solactive Global Carbon Credit CAD Hedged Index, which in turn tracks the prices of global cap-and-trade carbon emission allocation markets.
According to TDAM, the ETF provides investors to exposure to a growing market with diversification benefits, with carbon credits exhibiting a historically low correlation to traditional asset classes.
Bruce Cooper, Chief Executive Officer, TDAM and Senior Vice President, TD Bank Group, said:
“In addition to participating in the transition from fossil fuels to more sustainable energy sources, we expect positive returns from the carbon credit market as well as added diversification benefits within a portfolio. This new ETF offers investors a convenient and low-cost way to participate in a unique market that benefits from the increase in the price of carbon.”