Schwab Asset Management, the asset management arm of The Charles Schwab Corporation, has announced the launch of the Schwab Crypto Thematic ETF in the US (NYSE Arca: STCE).
The firm writes that the first day of trading is expected to be on or about August 4, 2022. The fund is designed to track Schwab Asset Management’s new proprietary index, the Schwab Crypto Thematic Index, providing investors with global exposure to companies that may benefit from the development or utilisation of cryptocurrencies and other digital assets. With an annual operating expense ratio of 0.30 per cent, STCE will be the lowest cost crypto-related ETF available to investors today, according to the firm.
“For investors who are interested in cryptocurrency exposures, there is a whole ecosystem to consider as more companies seek to derive revenue from crypto directly and indirectly,” says David Botset, Managing Director, Head of Equity Product Management and Innovation at Schwab Asset Management. “The Schwab Crypto Thematic ETF seeks to provide access to the growing global crypto ecosystem along with the benefits of transparency and low cost that investors and advisors expect from Schwab ETFs.”
The goal of the Schwab Crypto Thematic ETF is to track as closely as possible, before fees and expenses, the total return of the Schwab Crypto Thematic Index. Developed by Schwab Asset Management’s Thematic Research team, the index utilises the powerful combination of human insight; artificial intelligence technology acquired via the acquisition of Motif — a leader in thematic investing; and systematic models to identify, select, measure, and weight companies based on their relevance to the crypto-related theme.
The index does not directly track or invest in cryptocurrencies. Rather, it is designed to deliver 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.
The firm writes that it is the fifth largest provider of ETFs, and has more than a decade of experience managing ETFs and a robust capital markets team that plays a crucial role in ensuring the Schwab ETFs function efficiently. Schwab also writes that it has a lengthy history in indexing, having launched its first proprietary index, the Schwab 1000 Index, in 1991.