After doubting crypto for a few years, Charles Schwab Bank will launch its Schwab Crypto Thematic Index next week.
The fund, which will trade on the New York Stock Exchange Arca under the symbol STCE, will provide indirect exposure to “the crypto ecosystem,” the bank said in a statement.
Schwab’s prospectusthat the bank filed with the U.S. Securities and Exchange Commission on Friday, states in bold that the new fund “will not invest directly in cryptocurrency or digital assets.”
Instead, at least 80% of the fund’s assets will be invested in securities, such as shares of companies that have a stake in crypto. For example, the prospectus states that the fund currently has 44% of its assets invested in software companies and an additional 41% in the diversified financials sector.
“STCE may offer more targeted exposure to cryptocurrency-focused companies compared to blockchain technology ETFs, which may have significant exposure to multinational companies involved in blockchain (e.g., Amazon, IBM, Mastercard and others)” , David Botnet, Schwab’s head of equity product management, says Decrypt in an email.
The fund will have annual operating expenses of 0.30%, which equals $3 for every $1,000 invested. This means it will have “the cheapest crypto-related ETF available to investors today,” the company said in the announcement.
For comparison, the Bitwise Crypto Industry Innovators (BITQ) ETF charges 0.85% and VanEck, which just filed a new Spot Bitcoin ETF applicationcharges 0.50% on its Digital Transformation ETF (DAPP).
It is an attempt to gain an advantage while being behind in the field. Schwab has been lagging behind its traditional financial competitor, Fidelity, for a few years now.
In 2019, Charles Schwab CEO Walt Bettinger dismissed crypto, calling it too “speculative”. Meanwhile, in 2019, Fidelity had just obtained a charter to operate its Fidelity digital asset services as a limited liability trust company in New York State.
Then, in early 2022, Schwab’s Bettinger said The Dallas Morning News that he thinks there is “a huge void” in crypto for his business. Around the same time, Fidelity became the first company to allow employees to iinvest up to 20% of their 401(k) accounts in Bitcoin-to consternation of some anti-crypto lawmakers.