State Street Global Advisors has launched three new digital asset and disruptive technology exchange-traded funds (ETFs) in collaboration with Galaxy Asset Management, an affiliate of Galaxy Digital, according to a Sept. 10 press release.
The new funds aim to leverage active management to navigate the evolving digital asset landscape and capitalize on market inefficiencies.
The three ETFs — SPDR Galaxy Digital Asset Ecosystem ETF (DECO), SPDR Galaxy Hedged Digital Asset Ecosystem ETF (HECO), and SPDR Galaxy Transformative Tech Accelerators ETF (TEKX) — are designed to offer investors exposure to digital assets and emerging technologies like blockchain and artificial intelligence (AI).
Notably, these new crypto-related investment products are a result of the partnership State Street announced in June. State Street Corp. is the fifth-largest global asset manager, with over $4.1 trillion in assets under management (AUM) as of 2023.
Crypto exposure through companies and ETFs
All three funds divide their portfolios into 10 different allocations. The DECO fund focuses on companies poised to benefit from blockchain and crypto industry adoption, including crypto exposure through ETFs and futures.
As a result, the largest weight of its portfolio is Fidelity’s FBTC spot Bitcoin (BTC) ETF, which accounts for a 7% allocation.The fund also includes Bitcoin mining firms Terawulf, CleanSpark, Hut 8, and Core Scientific, with allocations varying between 4.02% to 6.45%.
Additionally, DECO also includes traditional finance companies, such as Visa and Meta, both with a 4% allocation each. CME Group, Taiwan Semiconductor, and Micron Technology wrap up DECO’s portfolio holdings.
HECO offers a similar portfolio but incorporates covered call and protective put options to manage volatility. Thus, it swaps Meta and FBTC shares for BlackRock and ProShares’ futures Bitcoin ETF BITO shares.
TEKX targets companies supporting new disruptive technologies, including blockchain and artificial intelligence. Most of its allocations are in power companies’ shares, with only Core Scientific and Terawulf from the crypto sector.
Anna Paglia, chief business officer for State Street Global Advisors, stated:
“Digital assets and blockchain technology have the power to transform financial markets as well as the economy over the next decade, and a number of companies will grow and flourish thanks to their contribution to this transformative technology.”
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