Salt Funds Management Limited manages the Carbon Fund. The Fund’s investment objective is to provide investors with a total return exposure to movements in the price of carbon credits in the New Zealand Emissions Trading Scheme (“NZ ETS”).
It also has the ability to buy carbon credits in international emission trading schemes. As a result, the Fund may also provide exposure to the price of carbon offshore. The Fund can also invest in international carbon credits, as well as futures, swaps or other derivatives that provide exposure to international schemes such as the European Union emissions trading system. The Fund can buy and sell carbon credits in these jurisdictions and any further schemes that are developed offshore.
The Fund generally gains its exposure through purchasing and holding carbon credits on the NZ ETS. We may also use swaps or other derivatives to gain exposure to the NZ ETS.
The Fund is actively managed by us. This means we buy and sell carbon credits on emission trading schemes based on our own analysis and assessment of the market. This includes our assessment of the price of carbon credits relative to the demand and supply of carbon credits and other factors including technological advancements, politics, regulation, fuel prices and even global weather and climate change.
The authorised investments for the Fund are:
- carbon credits in the NZ ETS;
- carbon credits traded in established international emissions trading schemes;
- derivatives (either exchange traded or over-the-counter) including but not limited to swaps, interest rate and forward rate contracts, forward foreign exchange contracts, options, and futures contracts;
- units and other prescribed interests in unit trusts or other pooled funds that invest in the investments referred to above, including unit trusts managed by us or our related parties, irrespective of whether the trust or fund is listed on the NZX Main Board and/or the Australian Securities Exchange; and
- cash or cash equivalent securities.