Spot Ethereum ETF ‘fee war’ begins as Franklin Templeton discloses fees

    01 Jun 2024

    American multinational investment firm Franklin Templeton has filed an amended S-1 application for its proposed spot Ether exchange-traded fund (ETF) product, and is the first among the applicants to disclose fees to investors.

    “The fees of the Sponsor accrues daily at an annualized rate equal to 0.19% of the net asset value of the Fund,” Franklin Templeton stated in a filing with the United States Securities and Exchange Commission on May 31.

    Bloomberg ETF analyst Eric Balchunas declared that “the opening shot in the ETH ETF fee war has been fired from Franklin” in an X post on the same day. He shut down questions if it might be “just for some initiation,” claiming that it “looks permanent” as its the same fee as Franklin’s spot Bitcoin ETF product.

    The sponsor fees — which are fees to compensate the fund manager for administration expenses — are a competitive aspect of ETF products, as investors typically choose one with the lowest fees.

    While VanEck, Invesco, and Galaxy also submitted amended S-1 applications simultaneously on the same day, none had disclosed sponsor fees.

    Other Ether ETF applicants are yet to disclose sponsor fees

    The S-1 applications are registration statements that companies have to file with the SEC, including detailed information about the company and the securities they intend to offer or issue.

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

    Just before the spot Bitcoin ETFs launched in January, Balchunas was referring to the constant S-1 filing amendments for fee adjustment as the “fee wars.”

    Several of the issuers even went as far as waiving fees altogether in an effort to be more competitive. Bitwise waived all fees on its spot Bitcoin ETF for the first six months of trading and the first $1 billion in assets.

    Grayscale Investments and BlackRock submitted amendments on May 30 and May 29, respectively. Bloomberg ETF analyst Eric Balchunas commented at the time that it was a “Good sign. Probably see rest roll in soon.”

    He noted that there will likely be another round to “fine tune” SEC comments, but said that spot Ether ETF launch by the end of June is a “legit possibility:”


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