Charles Schwab launches crypto equity ETF
Charles Schwab, the discount broker, is adding to its suite of ETFs, launching a blockchain industry themed equity ETF.
The Schwab Crypto Thematic ETF (STCE) tracks the Schwab Crypto Thematic Index and is listed on the NYSE.
The index identifies 50 global stocks – including those from emerging markets – that are driving the growth of blockchain. It uses the familiar techniques of keyword searches over public documents and analyst reviews to identify blockchain companies.
The fund charges 0.30%, making it the cheapest blockchain themed ETF.
Bernie’s commentary – all that data
Charles Schwab is one of the major forces in the US ETF market, yet people often forget it is there. Schwab has almost $260B across its 27 ETFs. Meaning its average ETF has $10B under management. Its ETF with the lowest AUM – FNDC – still has a stupendous $2.6B. There are no weaknesses in Schwab's product suite.
Schwab can do this because it’s the most powerful retail broker in the world. Schwab has a 33 million retail clients – that’s half the population of the UK. There’s then almost 8000 RIA’s using Schwab too. Which all means Schwab has roughly $7 trillion in assets, allowing any ETF Schwab launches to draw flows internally.
As well as retail and money – Schwab also has retail data. (Schwab keeps tabs on what all its retail investors are trading and searching. It sells some of this to market makers in a practice called “payment for order flow). So if there’s anyone that knows what kind of ETF US retail investors want – it’s Schwab.
Given this, it’s interesting that Schwab has thought to launch a blockchain ETF. Looking at the AUM in the 11 US-listed blockchain ETFs, you wouldn’t have thought there’s a market for a low cost blockchain ETF. US-listed blockchain ETFs collectively house under $1 billion.
So Schwab possibly knows something the rest of us don’t. This could be interesting to watch.