Schwab Asset Management has launched a new thematic equity ETF providing exposure to companies that stand to benefit from the development or utilization of crypto assets.
David Botset, Head of Equity Product Management and Innovation at Schwab Asset Management.
The Schwab Crypto Thematic ETF (STCE US) has been listed on NYSE Arca with an expense ratio of 0.30%, making it the lowest-cost crypto industry ETF on the market.
David Botset, Head of Equity Product Management and Innovation at Schwab Asset Management, commented: “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.
“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.”
Methodology
The fund is linked to the proprietary Schwab Crypto Thematic Index which is constructed using a combination of human insight and artificial intelligence technology.
Schwab first uses a natural language processing algorithm to screen a universe of developed and emerging market stocks to identify companies with strong thematic exposure to the following crypto industry activities: validating consensus mechanisms (such as mining or staking), trading cryptocurrencies or other digital assets, enabling the purchase or selling of goods using cryptocurrencies, and developing or implementing blockchain applications.
Analysts from Schwab’s Thematic Research division then individually analyze the screened stocks to ensure they are relevant to the crypto industry theme.
The index targets the 50 stocks with the strongest links to the crypto industry theme, weighting them by their thematic relevance scores.
Investors interested in the crypto industry theme may also wish to investigate similar products from BlackRock and Fidelity. The iShares Blockchain and Tech ETF (IBLC US) comes with an expense ratio of 0.47%, while the Fidelity Crypto Industry and Digital Payments ETF (FDIG US) costs 0.39%.