Asset managers State Street Global Advisors and Galaxy Asset Management launched three new cryptocurrency exchange-traded funds (ETFs) on Sept. 10, according to an announcement from State Street. The ETFs are designed to capitalize on 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 ETFs come as asset managers increasingly focus on offering diversified exposure to blockchain technology rather than specific crypto assets.
“We’re going to see a number of more single asset products, and then also certainly some index-based and diversified products,” Dave LaValle, Grayscale’s global head of ETFs, said in August.
SPDR Galaxy Digital Asset Ecosystem ETF (DECO) holdings. Source: State Street
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Franklin Templeton and Hashdex are among fund issuers awaiting regulatory approval to launch diversified spot crypto index ETFs in the US.
“We believe the next evolution of this market is the introduction of actively managed digital asset portfolios,” Anna Paglia, State Street’s chief business officer, said in a statement.
Actively managed ETFs employ dedicated analysts to opportunistically trade fund assets on shareholders’ behalf and often charge considerably higher management fees than passive index funds.
The State Street ETFs charge fees of 0.65% to 0.9%. That’s less than many other actively managed funds but still far more than passive crypto ETFs, which generally charge 0.25% or less.
State Street’s HECO and DECO are unique among ETFs, as they invest in a mix of stocks and cryptocurrencies. They aim to hold a “portfolio of companies that are well positioned to benefit from the growing adoption of the blockchain and digital asset industries as well as cryptocurrency exposures through ETFs and futures,” State Street said.
Alongside crypto, the ETFs also hold shares in Bitcoin miners, exchange operators, and semiconductor manufacturers. The Fidelity Wise Origin Bitcoin Fund (FBTC) is DECO’s largest holding, comprising 7% of its portfolio, according to State Street’s website.
The third ETF, TEKX, focuses on blockchain and artificial intelligence stocks.
The actively managed ETFs are issued by State Street but managed by Galaxy, which specializes in crypto.
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