Ethereum
Franklin Templeton Reveals Ethereum ETF Fees
Franklin Templeton has become the first asset manager to reveal the management fees for its Ether spot ETF project, and they are virtually non-existent.
By a updated S-1 filing With the Securities and Exchange Commission (SEC) on Friday, the Franklin Ethereum ETF will charge customers just 0.19% annually for holding Ether in their fund, a rate far lower than those assessed by global competitors that have already been posted online.
“Sponsor fees are accrued daily at an annualized rate equal to 0.19% of the net asset value of the fund and are payable at least quarterly in arrears in U.S. dollars or in kind or any combination thereof,” wrote Franklin.
That’s not all: the fund also promised to waive all sponsorship fees on its first $10 billion for the first six months after it goes live.
The ultra-low fees mimic those of Bitcoin spot ETFs launched in January, where competing funds clashed in a vicious fee war days before their products went live. Most now offer fees below 0.3%, and many, like Fidelity and VanEck, offer temporary fee waivers.
Franklin also launched a Bitcoin ETF at the time, but mostly lost the battle to competitors. both in volume and assets. This time, the asset manager wasted no time in publicizing its commission rate, thereby bringing its costs close to zero.
“For context, most ether spot ETFs in other countries or other vehicles are >1%” wrote Bloomberg ETF analyst Eric Balchunas on Twitter Friday. “The US ETF market is simply unique in its hardcore nature, but that’s why the vast majority of new investors invest in cash. [is] flows here.
As seen with Bitcoin ETFs, a 1% difference can make a world of difference to clients. For example, the Grayscale Bitcoin Trust (GBTC), which chose to maintain a relatively high 1.5% fee in January, has already lost more than half of its Bitcoin in outflows.
Despite boasting over 600,000 BTC at launch, it has now lost its title as the world’s largest Bitcoin ETF to BlackRock’s much cheaper fund. Meanwhile, more expensive Bitcoin ETFs in Canada and Europe also saw net outflows, despite growing demand for Bitcoin throughout the year.
In addition to Franklin, the SEC last week approved 19-b4 applications for seven other Ether spot ETFs. Experts say the funds will likely go live on national securities exchanges. in a few weeks.
Edited by Ryan Ozawa.