Schwab Crypto Thematic, which will trade on the New York Stock Exchange Arca under the STCE ticker, is set to be launched next week. It will offer indirect exposure to the crypto ecosystem.
According to Schwab’s prospectus, the new fund will not invest in cryptocurrency or digital assets directly. It highlighted that 80% of the fund’s assets will be invested in securities, such as shares of companies that have a stake in crypto. Currently, the fund has 44% of its assets invested in software companies, while 41% is in the diversified financials sector.
David Botnet, Schwab’s head of equity product management, said STCE can offer targeted exposure to cryptocurrency-focused companies compared to blockchain technology ETFs. He outlined that the fund will have an annual fund operating expense of 0.30%, that is, $3 per $1,000 invested. Basically, it will have the lowest cost crypto-related ETF available to investors today. In comparison, Bitwise Crypto Industry Innovators ETF (BITQ) charges 0.85% and VanEck charges 0.50% on its Digital Transformation ETF (DAPP).
It should be noted that Charles Schwab, CEO Walt Bettinger, was dismissive of crypto in 2019. He called it too speculative. Then in 2022, Bettinger highlighted that there is a tremendous void in crypto for his firm. Fidelity, around the same time, emerged as the first firm to allow employees to invest up to 20% of their 401(k) accounts in Bitcoin.