XShares Advisors is taking to the friendly skies and dipping into a commodity pool that is a breath of fresh air, with a new exchange traded fund (ETF) on the way.

AirShares EU Carbon Allowances Fund (ASO) is a new ETF that tracks the European Union Allowances (EUAs) for carbon emissions that are generally produced during the manufacturing process. According to XShares, the EU ETS is a cap-and-trade program that provides financial incentive for signatory countries of the Kyoto Protocol to reduce their carbon emissions.

This fund is technically a commodity pool, however. It seeks to provide results similar to the performance of a basket of four cabon credit futures contracts, expiring from December 2009 to 2012, says 24-7 Wall Street.

The new ETF is listed on the NYSE Arca, and follows on the heels of the recently dissolved HealthShares ETF family. Along with the dissolution of HealthShares, XShares also closed their real estate funds, Adelante Shares. Unfavorable timing and the wrong business cycle could be to blame for the reason these funds never quite got off the ground.

AirShares could be the providers’ answer, as environmental issues will be of more concern with the new administration ready to take office in January 2009. This ETF joins an exchange traded note (ETN), the iPath Global Carbon ETN (GRN) which tracks global carbon emissions credits. GRN is down 40% since its July 8 inception.

Tags: ASO, Commodity ETFs, Green ETFs, GRN