Schwab Launches Crypto Thematic ETF | ETF Trends

Schwab Asset Management, the asset management arm of the Charles Schwab Corp., announced that the Schwab Crypto Thematic ETF (STCE) begins trading on the NYSE Arca today.

The fund is designed to track a new proprietary index, the Schwab Crypto Thematic Index, and to provide investors with global exposure to companies that may benefit from the development or utilization of cryptocurrencies and other digital assets.

In a news release announcing the fund’s launch, David Botset, managing director, head of equity product management and innovation at Schwab Asset Management, said that STCE differs from “other crypto-related ETFs on the market today in the way that the index identifies, selects and weights constituents based on a company’s relevance to the crypto ecosystem using natural language processing.”

Botset added: “The index STCE is designed to track can offer more targeted exposure to cryptocurrency-focused companies compared to blockchain technology ETFs, which may have significant exposure to multi-national companies involved in blockchain. This new ETF is a great example of how we leverage our scalable foundation and core capabilities to innovate to help clients with more personalized needs.”

The index doesn’t directly track or invest in cryptocurrencies. Rather, it delivers global exposure to companies that may benefit from one or more of the following business activities: either directly or facilitating others in validating consensus mechanisms for (such as mining or staking) investing in or trading cryptocurrency or other digital assets; enabling the use of cryptocurrency or other digital assets to buy or sell goods or services; and developing, distributing, or implementing applications of blockchain or other distributed ledger technology, including in new cryptocurrencies or digital assets.

“Investors who want some exposure to Bitcoin prices in addition to long-term themes of digital transformation and/or digital asset equity sector exposure may prefer an ETF which tracks an index of crypto and blockchain equities compared to owning bitcoin directly,” said Roxanna Islam, CFA and associate director of research at VettaFi.

STCE has an annual operating expense ratio of 0.30%.

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