Salt Funds Management’s Carbon Fund has posted a return of -2.24% for the year ending 31 March 2025. This outcome is attributed to significant declines in carbon credit prices, influenced by recent policy decisions.
The fund’s strategy, which involves direct exposure to carbon credit prices, has been directly affected by these regulatory developments, highlighting the risks associated with such investments.
Targeting Carbon Pricing Through Focused Market Exposure
The Carbon Fund, a product of Salt Funds, targets investors seeking exposure to carbon pricing mechanisms. The fund had drawn 854 holders by March 2025 while it maintains a focused allocation—98% in carbon credit commodities and 2% in cash. 67.5% is committed to the NZ ETS, 28.5% to the fund itself, and 3.9% to Australia’s market.
The fund’s domestic concentration mirrors confidence in local policy, but recent returns suggest vulnerability to market fluctuations driven by regional regulation.
Salt Funds describes the vehicle as “designed to offer exposure to movements in the price of carbon credits.”
ESG Mandate Meets Market Volatility
The Carbon Fund, which charges “1% of the net asset value in total fund charges,” offers a pricing model typical of specialised ESG funds. However, active management has not shielded investors from recent losses amid instability in emissions markets.
The fund carries a risk rating of 5, or a “medium to high level of risk,” reflecting sensitivity to political and regulatory changes. While not suited for cautious investors, it may attract those “with a strong interest in environmental impact or carbon pricing speculation.” Market pressures have intensified as global climate enforcement remains uneven.
Long-Term ESG Strategy Anchored in Policy Trends
Although the Carbon Fund ended the fiscal year in negative territory, its structure continues to support investors seeking alignment with environmental regulation and emissions reduction. A rebound in carbon credit pricing remains a potential upside.
Salt Funds maintains a forward-looking stance, citing potential benefits from “regulatory tightening or global emissions mandates.” Ongoing momentum in ESG investing provides a base for the fund’s long-term growth prospects.
Conclusion
The Carbon Fund’s 2.24% annual decline highlights the turbulence of emissions-linked investments, even as it continues to attract attention for its alignment with environmental goals. Focused on carbon trading markets, the fund offers a pathway for investors prioritising both climate impact and speculative opportunity.
Salt Funds Management maintains the strategy as part of a broader effort to assess carbon investing’s long-term viability.