State Street and Galaxy Launch 3 New Crypto ETFs
Date: 2024-09-11 Author: Henry Casey Categories: BUSINESS
Asset managers State Street Global Advisors and Galaxy Asset Management announced the launch of three new cryptocurrency-based exchange-traded funds (ETFs) on Sept. 10, according to a press release from State Street. The ETFs are designed to tap into the growth of Web3.
State Street said the funds include the SPDR Galaxy Digital Asset Ecosystem ETF (DECO), the SPDR Galaxy Hedged Digital Asset Ecosystem ETF (HECO), and the SPDR Galaxy Transformative Tech Accelerators ETF (TEKX).
The launch of the ETFs comes as asset managers increasingly focus on offering diversified exposure to blockchain technologies rather than specific crypto assets.
“We’re going to see a lot of single-asset products, and certainly index and diversified products,” Dave LaValle, global head of ETFs at Grayscale, said in August.
Franklin Templeton and Hashdex are among fund issuers seeking regulatory approval to launch diversified spot crypto index ETFs in the U.S.
“We believe the next step in this market is going to be the adoption of actively managed digital asset portfolios,” said Anna Paglia, chief business officer at State Street.
Actively managed ETFs use specialized analysts to opportunistically trade the fund’s assets on behalf of shareholders and often charge significantly higher management fees than passive index funds.
State Street funds charge fees of 0.65% to 0.9%. That’s less than many other actively managed funds, but still significantly more than passive crypto ETFs, which typically charge 0.25% or less.
State Street’s HECO and DECO are unique among ETFs because they invest in a mix of stocks and cryptocurrencies. They aim to build “a portfolio of companies that are well positioned to benefit from the growing adoption of blockchain and digital assets, as well as crypto assets through ETFs and futures,” State Street said.
In addition to cryptocurrencies, the ETFs also include stocks of bitcoin miners, exchange operators, and semiconductor manufacturers. The largest portion of DECO’s portfolio, at 7%, is held by the Fidelity Wise Origin Bitcoin Fund (FBTC), according to State Street’s website.
A third ETF, TEKX, focuses on stocks in blockchain and artificial intelligence companies.
The actively managed ETFs are issued by State Street, but they are managed by Galaxy, which specializes in cryptocurrencies.
