Phatfaves'  Instablog

AirShares EU Carbon Allowances Fund (ASO) is a commodity pool that seeks to provide investors with investment results generally corresponding, before payment of ASO’s expenses and liabilities, to the performance of a basket of exchange-traded futures contracts for European Union Allowances (EUAs). An EUA is an entitlement to emit one metric tonne of carbon dioxide equivalent that is transferable under the European Union Greenhouse Gas Emissions Trading Scheme (EU ETS). The EU ETS is a cap-and-trade program that provides financial incentive for signatory countries of the Kyoto Protocol to reduce their carbon emissions.

AirShares is a commodity pool subject to the rules of the Commodity Futures Trading Commission (CFTC). AirShares is listed on NYSE Arca, providing investors with the flexibility of intraday trading and the ability to buy on margin. 

Initially, ASO’s portfolio holds unleveraged long positions in European Climate Exchange Carbon Financial Instrument Futures Contracts (ECX CFI Futures Contracts), traded on the ICE Futures trading platform, operated by ICE Futures, a subsidiary of the Intercontinental Exchange^® Each contract provides for delivery of 1,000 EUAs at a specified price. 

The EUA futures contracts ASO invests in expire in December of years 2009-2012. These years comprise the remainder of Phase II of the EU ETS and the first commitment period covered by the Kyoto Protocol. As contracts approach their December expiration, the fund sells expiring contracts and replaces them with contracts of later expirations. The fund also seeks to hedge the currency risk associated with fluctuations in the Euro/U.S. dollar exchange rate. AirShares is passively managed.