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Franklin Templeton has become the first asset manager to disclose the management fee for its proposed Ether spot ETF, making it virtually non-existent.
The Franklin Ethereum ETF will only charge clients who hold Ethereum in the fund an annual fee of 0.19%, according to an updated S-1 filing with the U.S. Securities and Exchange Commission (SEC) on Friday. The live has already ended.
“Sponsor fees are accrued daily at an annual rate equal to 0.19% of the fund’s net asset value and payable in arrears at least quarterly in U.S. dollars or in-kind or a combination thereof,” Franklin wrote.
That’s not all. The fund has pledged to waive all sponsor fees on the first $10 billion for the first six months after the fund becomes active.
The ultra-low fees mimic those of the Bitcoin spot ETF launched in January. Competing funds stiffed each other’s figures in a fierce fee war before the product was launched. Most currently offer fees of less than 0.3%, and many, such as Fidelity and VanEck, offer temporary fee waivers.
Franklin also launched a Bitcoin ETF at the time, but mostly lost the battle to its competitors in terms of trading volume and assets. This time, the asset manager wasted no time and revealed its commission rates, bringing costs close to zero.
“For context, most Ether spot ETFs in other countries or other instruments exceed 1%.” wrote Bloomberg ETF analyst Eric Balchunas tweeted on Friday. “The US ETF market is special in that it is hardcore, but that is why most of the new investor cash is flowing here.”
As seen with the Bitcoin ETF, a 1% discrepancy can make a big difference for customers. For example, Grayscale Bitcoin Trust (GBTC), which decided to maintain its relatively high fees of 1.5% in January, has already lost more than half of its assets due to Bitcoin 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 increased demand for Bitcoin throughout the year.
In addition to Franklin, the SEC approved 19-b4 applications for seven other Ether spot ETFs last week. Experts say the fund is likely to be listed on a national stock exchange. within a few weeks.
Edited by Ryan Ozawa.
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