Schwab Launches Its First Crypto-related ETF—the Schwab Crypto Thematic ETF

Rhea-AI Summary

Schwab Asset Management has announced the launch of the Schwab Crypto Thematic ETF (NYSE Arca: STCE), set to begin trading on or around August 4, 2022. This ETF will track the Schwab Crypto Thematic Index, providing global exposure to companies involved in the cryptocurrency ecosystem. With an operating expense ratio of 0.30%, STCE is positioned as the lowest cost crypto-related ETF available. The index aims to select companies facilitating or benefiting from cryptocurrency activities, emphasizing transparency and low costs.

Positive

• Lowest cost crypto-related ETF with a 0.30% expense ratio.
• Provides exposure to the growing global crypto ecosystem.
• Utilizes advanced AI technology for index selection.

Negative

• The ETF does not invest directly in cryptocurrencies.
• Investment in a non-diversified fund may increase volatility.
• New and developing technology may pose unforeseen risks.

WESTLAKE, Texas--(BUSINESS WIRE)-- Schwab Asset Management, the asset management arm of The Charles Schwab Corporation, today announced the launch of the Schwab Crypto Thematic ETF (NYSE Arca: STCE). 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 utilization of cryptocurrencies and other digital assets. With an annual operating expense ratio of 0.30%, STCE will be the lowest cost crypto-related ETF available to investors today.¹

“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,” said 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 utilizes 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 fifth largest provider of ETFs², Schwab Asset Management 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 has a lengthy history in indexing, having launched its first proprietary index, the Schwab 1000 Index^®, in 1991.

About Schwab Asset Management

One of the industry’s largest and most experienced asset managers, Schwab Asset Management offers a focused lineup of competitively priced ETFs, mutual funds and separately managed account strategies designed to serve the central needs of most investors. By operating through clients’ eyes, and putting them at the center of our decisions, we aim to deliver exceptional experiences to investors and the financial professionals who serve them. As of June 30, 2022, Schwab Asset Management managed approximately $575.9 billion on a discretionary basis and $34.4 billion on a non-discretionary basis. More information is available at www.schwabassetmanagement.com.

About Charles Schwab

At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.

More information is available at www.aboutschwab.com. Follow us on Twitter, Facebook, YouTube and LinkedIn.

Disclosures:

Investors should consider carefully information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges and expenses. You can obtain a prospectus, or if available, a summary prospectus by visiting schwabassetmanagement.com/prospectus. Please read it carefully before investing.

Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF. Shares of ETF are bought and sold at market price, which may be higher or lower than the net asset value (NAV).

The fund will not invest in any cryptocurrency or digital assets directly. It invests in companies listed in the Schwab Crypto Thematic Index and is designed to deliver global exposure to companies that may benefit from the development or utilization of cryptocurrencies (including bitcoin) and other digital assets, and the business activities connected to blockchain and other distributed ledger technology.

The fund is non-diversified, which means that it may invest in the securities of relatively few issuers. As a result, a single adverse economic or regulatory occurrence may have a more significant effect on the fund’s investments, and the fund may experience increased volatility.

The technology relating to digital assets, including blockchain, is new and developing and the risks associated with digital assets may not fully emerge until the technology is widely used. In addition, the values of the companies included in the fund may not be a reflection of their connection to digital assets but may be based on other business operations or lines of business which means that such companies’ operating results may not be significantly tied to their respective activities related to digital assets.

The fund invests in a portfolio of securities that are based on a theme and its performance may suffer if such theme is not correctly identified or if the theme develops in an unexpected manner. Performance may also suffer if the securities included in the index do not benefit from the development of such theme.

International investments involve additional risks, which include differences in financial accounting standards, currency fluctuations, geopolitical risk, foreign taxes and regulations, and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.

The Schwab Crypto Thematic Index was developed by Charles Schwab Investment Management, Inc. and 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 and services; or developing, distributing or implementing applications of blockchain or other distributed ledger technology including in new cryptocurrencies or digital assets. For the complete and current index methodology please refer to schwabassetmanagement.com/products/stce.

Schwab Asset Management™ is the dba name for Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for Schwab ETFs. Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). Schwab Asset Management is a separate but affiliated company and subsidiary of The Charles Schwab Corporation, and is not affiliated with SIDCO.

(0622-2UF3)

¹ Source: Based on crypto-focused ETFs within ETF.com ECS’ “Digital Economy” niche category, June 30, 2022.
² Source: etfdb.com, “ETF Issuer AUM League Table,” July 18, 2022.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220728006119/en/

Christine Hudacko

Charles Schwab

415-961-3790

Source: The Charles Schwab Corporation

FAQ

What is the Schwab Crypto Thematic ETF (STCE)?

The Schwab Crypto Thematic ETF (NYSE Arca: STCE) is designed to track the Schwab Crypto Thematic Index, providing exposure to companies benefiting from cryptocurrency activities.

When does the Schwab Crypto Thematic ETF start trading?

The ETF is expected to begin trading on or around August 4, 2022.

What are the operating expenses of the Schwab Crypto Thematic ETF?

The ETF has an annual operating expense ratio of 0.30%, making it the lowest cost crypto-related ETF available.

What companies does the Schwab Crypto Thematic ETF invest in?

The ETF invests in companies that may benefit from cryptocurrency development, blockchain technology, and related business activities but does not directly invest in cryptocurrencies.

How does the Schwab Crypto Thematic Index select companies?

The index uses a combination of human insight, AI technology, and systematic models to identify and weight companies relevant to the crypto-related theme.