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26/05/09 Carbon Outperforms Oil, Unhampered by Negative Roll Yield

– ETFS Carbon (CARB) has surged by 63 percent over the past 3 months, outperforming the DJ-AIG Total Return Commodity Index by….

53 percentage points and the MSCI Total Return World Index by over 52 percentage points. Carbon has outperformed a number of asset classes as cyclical-related commodities, such as steel and coal, have benefited strongly from the bounce in investor risk appetite amidst increasing market optimism on possible signs of ‘green shoots’ for a global economic recovery.
– CARB has provided a leveraged play on global energy markets, outperforming short dated oil futures returns by 43 percentage points on average over the past 3 months. CARB has also outperformed over a 3 year horizon.
– In contrast to credit and most financial markets, carbon market liquidity has continued to increase through the credit crisis, with the number of EUA futures traded tripling since the start of September.
– Moves towards a US cap and trade system similar to that of the EU, and the post-Kyoto Accord, could provide further support to market liquidity in the medium term. The EU has recently reaffirmed its stance to create a structurally scarce EUA market.

Source:ETFWorld.co.uk – ETFSecurities


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