The Schwab Crypto Thematic ETF (STCE) Begins Trading on NYSE Arca

Rhea-AI Summary

Today, the Schwab Crypto Thematic ETF (STCE) commenced trading on NYSE Arca, managed by Schwab Asset Management. This ETF aims to track the Schwab Crypto Thematic Index, offering investors global exposure to companies benefiting from cryptocurrencies and digital assets. With an operating expense ratio of just 0.30%, STCE is the lowest-cost crypto-related ETF available. Unlike traditional cryptocurrencies, this fund focuses on companies engaged in various blockchain-related activities, from mining to facilitating cryptocurrency transactions.

Positive

• STCE offers the lowest operating expense ratio of 0.30% compared to other crypto-related ETFs.
• The fund provides targeted exposure to cryptocurrency-focused companies rather than broad blockchain technology firms.
• Developed using AI and human insight, the Schwab Crypto Thematic Index aims for precision in identifying relevant companies.

Negative

• The fund does not invest directly in cryptocurrencies, which may limit exposure to potential gains in the crypto market.
• As a non-diversified fund, it may face increased volatility due to potential reliance on a limited number of issuers.
• Risks associated with digital assets are evolving and may not be fully understood, impacting fund performance.

WESTLAKE, Texas--(BUSINESS WIRE)-- Today the Schwab Crypto Thematic ETF (STCE) begins trading on the NYSE Arca. The fund, from Schwab Asset Management, the asset management arm of The Charles Schwab Corporation, 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. With an annual operating expense ratio of 0.30%, STCE is the lowest cost crypto-related ETF available to investors today.¹

“We’re excited to be able to offer investors the Schwab Crypto Thematic ETF, which is different than 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,” said David Botset, Managing Director, Head of Equity Product Management and Innovation at Schwab Asset Management. “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.² 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 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 is built with the powerful combination of human insight, artificial intelligence technology and systematic models.

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.

More information on the Schwab Crypto Thematic ETF can be found here.

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.

(0822-2EXM)

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1} Source: Based on crypto-focused ETFs within ETF.com ECS’ “Digital Economy” niche category, June 30, 2022.
² All corporate names are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005323/en/

Christine Hudacko

Charles Schwab

415-961-3790

Source: The Charles Schwab Corporation

FAQ

What is the Schwab Crypto Thematic ETF (STCE)?

STCE is an exchange-traded fund designed to provide global exposure to companies benefiting from cryptocurrencies and digital assets, launched by Schwab Asset Management.

What is the expense ratio of the Schwab Crypto Thematic ETF?

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

When did the Schwab Crypto Thematic ETF start trading?

The Schwab Crypto Thematic ETF began trading on the NYSE Arca today.

How does the Schwab Crypto Thematic Index select companies?

The Schwab Crypto Thematic Index selects companies based on their relevance to the crypto ecosystem using natural language processing.

Does the Schwab Crypto Thematic ETF invest directly in cryptocurrencies?

No, the Schwab Crypto Thematic ETF does not invest directly in cryptocurrencies; it invests in companies associated with the cryptocurrency ecosystem.