KraneShares California Carbon ETF Sees Major Surge in Short Interest

The KraneShares California Carbon Allowance Strategy ETF, trading under the ticker symbol NYSEARCA:KCCA, experienced a notable increase in short interest in January 2024. As of January 15, short interest totaled 131,973 shares, reflecting a sharp rise of 117.2% from the previous month’s total of 60,749 shares. Given an average trading volume of 57,934 shares, the current short-interest ratio stands at 2.3 days, indicating that approximately 1.9% of the ETF’s shares are currently short sold.

During midday trading on Friday, KCCA shares were down by $0.15, reaching a price of $15.21. The trading volume at that time was 44,467 shares, slightly below the average volume of 49,653 shares. Over the past year, KCCA has fluctuated significantly, with a low of $13.61 and a high of $18.16. The ETF’s fifty-day moving average is $16.50, while the 200-day moving average is $16.58. The fund currently holds a market capitalization of approximately $104.95 million, a price-to-earnings (P/E) ratio of 10.81, and a beta of 0.18.

Dividend Announcement and Financial Details

In addition to its fluctuating stock performance, the KraneShares California Carbon Allowance Strategy ETF recently declared a quarterly dividend. This dividend was paid on December 23, 2023, to investors on record as of December 22. Shareholders received $0.4832 per share, translating to an annualized dividend of $1.93 and a dividend yield of 12.7%.

About the ETF and Its Market Position

The KraneShares California Carbon Allowance Strategy ETF is designed to track the IHS Markit Carbon CCA index, focusing on liquidity-weighted carbon credit futures. Since its launch on October 5, 2021, the fund has aimed to provide investors with exposure to California’s carbon allowance market. This strategy reflects growing investor interest in environmentally sustainable investments as global policies increasingly prioritize carbon reduction.

As hedge funds and institutional investors continue to evaluate the ETF’s performance amid rising short interest, KCCA’s future trajectory will likely depend on broader market conditions and regulatory developments in carbon trading. The significant growth in short interest may also suggest a more cautious outlook among traders regarding the ETF’s near-term performance.

Overall, KCCA remains a focal point in the evolving landscape of carbon trading and sustainability investments, drawing attention from a diverse array of market participants.