Franklin Templeton begins fee war with 0.19% offer

adminJune 1, 2024

Following the U.S. Securities and Exchange Commission’s (SEC) sudden approval of an Ethereum spot ETF, several potential issuers have now filed revised versions of their S-1 forms. This development follows the Commission’s earlier directive requiring all asset managers vying to launch the Ether Spot ETF to file draft S-1 documents on Friday.

Franklin Templeton opens with 0.19% sponsor fee

Among the many S-1 amendments filed by the SEC last Friday, top asset management firm Franklin Templeton caught the attention of a large audience after becoming the first potential issuer of an Ethereum spot ETF to disclose sponsor fees.

Until this afternoon @vaneck_us, @InvescoUS/@galaxyhqand @FTI_DA An S-1 amendment was submitted. #Ethereum ETF. @Grayscale I submitted it yesterday @black stone I submitted it on Wednesday.
Franklin charges a fee of 0.19%. Others have not been revealed yet. pic.twitter.com/AGEyXqYBSP
— James Seyff (@JSeyff) May 31, 2024

The New York-based investment firm aims to charge a 0.19% fee on its Ether spot ETF if approved. Therefore, for every $1,000 invested in this fund, investors will pay $1.90 to cover ETF management and operating costs.

In all ETF markets, sponsor fees are an important factor that acts as an incentive to attract investment. Since Franklin Templeton is the first issuer to disclose sponsor fees, this could set a precedent as other asset managers can set a figure for this valuation to lure investors.

Notably, Franklin Templeton offers the same sponsor fee for its Bitcoin Spot ETF, which is one of the lowest fees in the market for any given ETF. In addition, other issuers including VanEcK, Invesco Galaxy, Grayscale, BlackRock and 21Shares have also filed amended Form S-1 with the SEC.

Although the Form 19b-4 for these ETF applications was approved on May 23, Form S-1 processing remains important for initiating any form of transaction. This process can be time-consuming, especially since the submitted Form S-1 may require additional revisions based on the Board’s comments.

JP Morgan predicts decline in demand for Ethereum spot ETF

In other news, prominent investment bank JPMorgan predicted that the Ethereum spot ETF would significantly underperform Bitcoin. According to several reports, JPMorgan analysts expect these ETFs could attract around $3 billion in investments in 2024, which could increase to $6 billion once staking is introduced.

For context, the Bitcoin spot ETF launched in January is currently valued at $13.69 billion, according to data from SoSoValue. In a recent interview, Bloomberg analyst James Seyffart shared similar sentiments with JPMorgan, highlighting the vast difference in the market caps of Ethereum and Bitcoin.

At the time of writing, Ethereum is trading at $3.777, with a slight increase of 0.45% over the last 24 hours. At the same time, the daily trading volume of the asset increased by 4.80% and its value reached $15.4 billion.