Ether ETF Price War Takes Off As Franklin Templeton Becomes First To Disclose Sponsor Fees

Ethereum Futures ETFs Falter Following Launch, Sparking Concerns For Bulls

Franklin Templeton has become the first investment giant to reveal its fee plans for its proposed spot Ethereum exchange-traded fund (ETF).

In its amended S-1 form with the U.S. Securities and Exchange Commission on Friday, Franklin Templeton said it plans to charge customers a 0.19% sponsor fee per year for holding Ethereum in their fund.

“The sponsor’s fee is accrued daily at an annualized rate equal to 0.19% of the net asset value of the fund and is payable at least quarterly in arrears in U.S. dollars or in-kind or any combination thereof,” Franklin stated in the filing.

Moreover, the asset manager has promised to waive sponsor fees for its ETH ETF offering for the first $10 billion during the first six months.

Bloomberg’s senior ETF analyst Eric Balchunas quickly remarked on Franklin Templeton’s proposed fee. “The opening shot in the ETH ETF fee war has been fired by Franklin, 19bps,” Balchunas posited in an X post.

For context, most ether spot ETFs in other countries or in other vehicles are >1%. The US ETF market is just special in its hard core ness but that’s why vast majority of new inv cash flowing here.

— Eric Balchunas (@EricBalchunas) May 31, 2024

The low fee is similar to that of spot Bitcoin ETFs that went live in January when all wanna-be BTC ETF issuers cut their planned fees in a brutal fee war days before their products were launched. The majority now charge fees below 0.3%, with some—like Fidelity and VanEck—temporarily eliminating fees for a competitive edge.

Other Potential Ether ETF Providers Yet To Announce Fees

The S-1 registration statements that asset managers must file with the Securities and Exchange Commission include detailed information about the firm and the securities they plan to offer.

The securities watchdog asked would-be Ethereum ETF issuers to finalize their S-1 forms by March 31. While BlackRock, VanEck, and Invesco Galaxy also submitted their revised forms, none disclosed their planned sponsor fees.

“Also no fees in any of the new S-1s. Fee war on hold for now,” Bloomberg’s Balchunas later observed.

Notably, prominent financial institutions have already secured ticker symbols for their Ethereum ETFs, indicating a huge step toward introducing these investment vehicles in the United States. However, it could take several weeks before the S-1 forms become effective and spot ETH ETFs start trading officially.

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