HECO vs STCE

HECODState Street Galaxy Hedged Digital Asset Ecosystem ETF

STCEASchwab Crypto Thematic ETF

In short

HECO Crypto-adjacent stocks with an airbag bolted on. HECO holds the miners, exchanges and blockchain builders, adds crypto exposure via ETFs and futures, then runs an options overlay built to damp the volatility.

STCE Crypto exposure without owning a coin. STCE holds about 40 global companies tied to digital assets and blockchain, chosen by Schwab's own index, at a price that undercuts most thematic funds.

Stated mandate

HECO The fund seeks long-term capital appreciation by investing in companies expected to benefit from crypto-asset and blockchain adoption, while also obtaining crypto exposure through ETFs and futures. It uses an option-overlay hedge strategy to manage overall volatility.

STCE The fund seeks to track, before fees and expenses, an index providing global exposure to companies that may benefit from developing or using cryptocurrencies and other digital assets, or from business activities tied to blockchain and distributed-ledger technology.

Why people hold it

• HECO The hedge is the point: an option overlay sits on top of the crypto-equity basket to manage overall volatility, a different bargain than owning the sector raw.ssga.com
• Two exposures in one wrapper: operating companies expected to benefit from crypto and blockchain adoption, plus direct crypto exposure through ETFs and futures.ssga.com
• Actively managed, global mandate, roughly 60 holdings. The manager can rotate as the ecosystem shifts rather than ride a fixed index.
• Conventional 1940 Act ETF plumbing from State Street, run alongside Galaxy on the digital-asset side.

• STCE Charges 0.30% a year, roughly half the typical fund in its global thematic group. Schwab billed it as the lowest-cost crypto-related ETF when it launched in 2022.aboutschwab.com
• Stocks, not coins: the index targets companies worldwide that may benefit from cryptocurrencies, digital assets and distributed-ledger technology.schwabassetmanagement.com
• Cheap, straightforward and liquid enough for a niche theme, which puts it in the top quartile of its global thematic peer group.

Worth knowing

• HECO At 0.90% a year it prices above the typical fund in its crypto-equity peer group, and above its unhedged sibling DECO at 0.65%. The overlay is the upcharge.
• Thinly traded, so spreads can widen. Limit orders matter more here than in the category's heavyweights.
• Hedges cut both ways: damping volatility also means surrendering some of the sector's sharpest upswings. Short history too, with a 2024 launch.

• STCE Crypto-linked equities move violently, and with roughly 40 non-diversified names, a stumble at one holding is felt across the fund.aaii.com
• It owns crypto-adjacent businesses, not bitcoin, so its path can diverge from the coins themselves in either direction.aaii.com
• Modest asset base by ETF standards and distributions land only once or twice a year, so this is a theme sleeve rather than an income holding.

Full HECO profile⁠

Full STCE profile⁠