Industry Updates

DWS cuts physical carbon ETC fee

Undercuts CO2 by 15bps

Lauren Gibbons

a large plume of smoke in the sky

DWS has lowered the fee of its physical carbon ETC, extending the fee gap between the only other physically-backed EU Carbon Allowance (EUA) ETP on the European market.

The fee for the Xtrackers Physical Carbon EUA ETC Security (XEAL) was reduced from 0.79% to 0.74% as of 24 June.

The fee cuts widens the gap between XEAL’s closest competitor - the SparkChange Physical Carbon EUA ETC (CO2) - which has a total expense ratio (TER) of 0.89%.

Launching in 2023, XEAL tracks the performance of the spot price for EU carbon emissions.

The European Energy Exchange sets the spot price for emission certificates, which are physically backed.

This market helps to combat pollution by requiring companies to hold EU-issued certificates for each tonne of carbon they emit. As the EU limits these allowances, if a company wants to emit more carbon than it has certificates, it must buy the rights of other companies.

SparkChange launched (CO2), the world's first physical EUA ETP, in November 2021,

WisdomTree was the first to launch a carbon ETP in Europe – WisdomTree Carbon (CARB) – which tracks carbon futures with a TER of 0.35%.

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