Franklin Templeton Sets Fee Bar Low for Ethereum ETF

Franklin Templeton has made waves in the asset management world by revealing an incredibly low management fee for their proposed Ether spot ETF. According to an updated S-1 filing with the Securities and Exchange Commission (SEC) on Friday, the Franklin Ethereum ETF will charge customers a mere 0.19% per year for holding Ether in their fund. This fee is significantly lower than those offered by global competitors that have already entered the market.

In their filing, Franklin stated, “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.” But the low fees don’t stop there. The fund has also committed to waiving all sponsor fees on its first $10 billion for the first six months after the fund goes live.

This ultra-low fee mirrors the strategy seen in Bitcoin spot ETFs launched in January, where competing funds engaged in a fee war just days before their products hit the market. Today, most Bitcoin ETFs offer fees below 0.3%, with many major players, such as Fidelity and VanEck, providing temporary fee waivers. Franklin, which previously launched a Bitcoin ETF, aims to regain its footing in the market with this aggressive fee rate, driving costs close to zero.

Eric Balchunas, an ETF analyst at Bloomberg, noted on Twitter, “For context, most ether spot ETFs in other countries or in other vehicles are >1%. The US ETF market is just special in its hardcore-ness but that’s why the vast majority of new investor cash [is] flowing here.” As seen with Bitcoin ETFs, even a 1% difference in fees can significantly impact customer preference. For instance, the Grayscale Bitcoin Trust (GBTC), which maintained a relatively high fee of 1.5% upon launch, has experienced substantial outflows, losing more than half of its Bitcoin holdings.

Despite initially boasting over 600,000 BTC, it has since surrendered its title as the world’s largest Bitcoin ETF to BlackRock’s more cost-effective fund. Similarly, pricier Bitcoin ETFs in Canada and Europe have faced net outflows, despite increasing demand for Bitcoin throughout the year. Alongside Franklin, the SEC recently approved 19-b4 applications for seven other Ether spot ETFs, indicating that these funds are likely to debut on national securities exchanges within the coming weeks.

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Maria Irene
Maria Irenehttp://ledgerlife.io/
Maria Irene is a multi-faceted journalist with a focus on various domains including Cryptocurrency, NFTs, Real Estate, Energy, and Macroeconomics. With over a year of experience, she has produced an array of video content, news stories, and in-depth analyses. Her journalistic endeavours also involve a detailed exploration of the Australia-India partnership, pinpointing avenues for mutual collaboration. In addition to her work in journalism, Maria crafts easily digestible financial content for a specialised platform, demystifying complex economic theories for the layperson. She holds a strong belief that journalism should go beyond mere reporting; it should instigate meaningful discussions and effect change by spotlighting vital global issues. Committed to enriching public discourse, Maria aims to keep her audience not just well-informed, but also actively engaged across various platforms, encouraging them to partake in crucial global conversations.

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