Richard Kang1

Interactive Q&A: Jeffrey L. Feldman, Creator of HealthShares and Founder and Chairman of XShares Group LLC

Like David, I am also very interested in knowing more about your expansion to the carbon credit market. How will your ETF offering differ from direct exposure to this market? From what I know, the carbon trading market started out in the UK. Are you building your offering based on an existing template out of the UK ... in other words, is there plans for another ETF-like offering in the UK or elsewhere that you are using as a blueprint? When I first heard news of plans for this product, I assumed it was to be a US domiciled product and would be "first to market" globally (and thus, you're truly building this from scratch, not from an existing template). So, again, like David I'm interested in the structure and any unique tweaks found in what I think will be a most interesting offering.

With regard to ETFs that provide exposure to specific states in the union ... I wonder who the market for this type of investment is. From an asset allocation and portfolio construction perspective, it doesn't seem like a family of ETFs that easily fits within most investors' existing framework. My first guess would be going after various types of institutional investors (more of the smaller ones, I think). I suppose if you go to a number of California (as an example) pensions, endowments, government related organization, etc. they might have some sort of guideline that promotes local investment and then they might go for a California ETF. But in today's environment, institutions are looking globally for diversification so I don't know how much interest they would have for this ... and this is especially true for the bigger pensions like CalPERS or CalSTRS. Just curious on how you plan on marketing these.

Thanks for your time on this.