We do the research, you get the alpha!
Get exclusive reports and key insights on airports, NFTs and more! Sign up for Alpha Reports now and step up your game!
Go to Alpha Reports
Franklin Templeton has become the first asset manager to disclose management fees on its ether spot ETF—and it's almost nonexistent.
In an updated S-1 filing with the Securities and Exchange Commission (SEC) on Friday, the Franklin Ethereum ETF charges clients just 0.19% to hold Ether in their funds. It has already gone live.
“The sponsor's fee is collected daily at an annual rate equal to 0.19% of the fund's net asset value and paid at least quarterly in arrears in US dollars or in kind or in any combination,” Franklin said. Franklin wrote.
That's not all: The fund has pledged to waive all of the first $10 billion in sponsor fees within six months of going live.
The ultra-low fee mimics the Bitcoin spot ETFs that launched in January, when rival funds thrashed each other's numbers in a vicious battle just days before their products went live. Most now offer fees as low as 0.3%, with many—like Fidelity and VanEck—temporarily waiving fees.
Franklin launched a Bitcoin ETF at the time, but it largely lost the battle to its competitors in terms of both volume and assets. At this point, the asset manager wastes no time driving the cost down to zero to get the payment amount out the door.
“For context, most Ether spot ETFs are >1% in other countries or other vehicles,” Bloomberg ETAT analyst Eric Balchunas wrote on Twitter on Friday. “The US ETF market is unique in its strength, but that's why most new investor money [is] It flows here.”
As seen with Bitcoin ETFs, a 1% difference can make all the difference for clients. For example, Grayscale Bitcoin Trust (GBTC), which opted to keep a relatively high fee of 1.5% in January, has already lost more than half of its bitcoins in expenses.
Despite boasting over 600,000 BTC at launch, it has now lost the title of the world's largest bitcoin ETF to BlackRock's much cheaper fund. Meanwhile, we've also seen net inflows into the more expensive Bitcoin ETFs in Canada and Europe, even as demand for Bitcoin continues to rise throughout the year.
In addition to Franklin, the SEC last week approved 19-b4 filings for seven other ether spot ETFs. Experts say the money could go live on national securities exchanges within weeks.
Edited by Ryan Ozawa.
Daily Debrief Newspaper
Start every day with top news stories, plus original features, podcasts, videos and more.
