Schwab Crypto Thematic ETF (09S4)
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ARCA Primary XBER Summary
09S4 Chart
STCE: A Bitcoin Mining ETF Masquerading As A 'Crypto Fund'
The Schwab Crypto Thematic ETF is heavily concentrated in Bitcoin mining stocks, diverging from its stated broad crypto exposure objective. STCE's construction methodology allows inclusion of companies with minimal or no true crypto or blockchain exposure, undermining thematic purity. Over 60% of STCE's assets are allocated to Bitcoin miners, whose long-term profitability is structurally challenged by declining mining rewards.
STCE: A High-Beta Crypto Bet With Technical Support And Seasonal Tailwinds
Schwab Crypto Thematic ETF is rated a buy, offering exposure to crypto-linked stocks with reasonable valuation and seasonal tailwinds. STCE exhibits high volatility, with a 64% annualized standard deviation and significant tracking error, making it a high-risk, high-reward play. The ETF is concentrated in fintech, heavily weighted toward Financials and Information Technology, and relies on bullish trends in bitcoin and ether.
STCE: Not My Preferred Crypto Play
The Schwab Crypto Thematic ETF seeks to provide exposure to companies exposed to the cryptocurrency theme. Despite a solid 132% return since inception, STCE has underperformed peers like BITQ and FDIG. STCE's index methodology results in significant weights to some relatively small companies.
Schwab Crypto Thematic ETF (09S4) FAQ
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Schwab Crypto Thematic ETF Profile
| XBER Exchange | US Country |
Overview
The firm operates as an investment entity, specializing in mirroring the performance of a specified index. It aims to replicate the total return of its chosen index, generating returns for its investors based on the index's performance. Significantly, the firm distinguishes itself by excluding investments in cryptocurrencies or digital assets, focusing rather on more traditional investment vehicles. The investment strategy employed is characterized by a non-diversified approach, implying a concentration in the assets that are believed to closely track the performance of the underlying index.
Products and Services
- Index Replication Investment Strategy
This service involves the firm using its resources to replicate the performance of a chosen index. By investing in financial instruments that mimic the composition and performance of the index, the firm seeks to provide returns that closely match the total return of the index. This strategy is typically employed by investors looking for exposure to specific market segments without directly purchasing all the securities within an index.
- Exclusion of Cryptocurrency Investments
In a marked deviation from the trend of integrating digital assets into investment portfolios, the firm explicitly avoids direct investments in cryptocurrencies or any digital assets. This policy caters to investors who are skeptical or cautious about the volatility and regulatory uncertainties associated with the digital asset market. It emphasizes a traditional investment approach, focusing on assets and markets with established regulatory frameworks.
