EUA Strategy Fund

For professional investors only

Why invest in EU Emissions Allowances (EUAs)?

The EU ETS is considered a cornerstone to achieve net zero by 2050 in the EU economy. EUAs are regulated carbon emission allowances, where one EUA unit equals the right to emit 1 tonne CO2e.
Under the EU ETS, as a cap-and-trade system, market participants trade the right to emit one tonne of CO2e.
The EU ETS is the globally leading regulated carbon market and EUAs are qualified as a financial instrument under MiFID II.
Trust is reflected in the total annual traded volume of €751billion in 2022, representing more than 80% of the global share in regulated carbon allowance markets. The EU Commission perceives it as a key pillar in achieving the EU climate targets by 2050¹.

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Investing into EUAs at a Glance

Return Outlook

Profit from the return outlook for EUAs. The mechanics of the EU ETS will reduce available EUAs over time, which drives the structural scarcity value of EUAs². Reduced EUA supply is fundamentally supported by Europe’s tightening climate regulation and decreasing carbon emission budgets until 2030 and 2050 under the EU ETS.

Diversification benefits and favourable correlation

Gain exposure to EU carbon market and diversify sources of return. Through low return correlation with traditional asset classes EUAs offer portfolio diversification opportunities.

Climate transition risk resilience and hedging

Protect your portfolio against climate transition risks driven by accelerated global emissions reduction targets. Carbon price risk, as well as carbon pricing induced inflation may further increase. Hedge against potential portfolio losses by purchasing EUAs as an investment.

Carbon Emissions Mitigation

Contribute to carbon mitigation impact in the real economy. Every purchased EUA is not available for polluting companies. Higher carbon emissions prices incentivize companies to accelerate decarbonization efforts and switch to low-carbon solutions. The EU ETS has proven to be an effective tool in driving emissions reductions. Industries covered under the EU ETS reduced emissions by about 47% between 2005 and 2023³.

Why Invest with Munich Re Investment Partners

Munich Re Investment Partners’ EUA Strategy Fund is globally one of the first open ended investment funds allowing institutional investors to directly invest into EUAs

Physical ownership of EUAs is financially attractive^4,5 and may contribute to CO2 mitigation impact via the EU Emissions Trading Scheme.

SFDR Article 8 classification.

Sustainability-Related Disclosures

This is a marketing communication solely for Eligible Counterparties and Professional Investors. Products and services of Investment Partners are only available in countries where properly registered. Please see the Legal Notice on this website for further information.

References: 1: EU Emissions Trading System (EU ETS) 2: EU Emissions Trading System (EU ETS) 3: European Environment Agency (2023) 4: Carbon Pulse (2021) 5: Investing in Carbon Credits (2022)