- The global asset manager will impose fees on investors of 0.19%, which is comparable to the low costs in the fiercely competitive Bitcoin ETF market.
As the first asset manager to do so, Franklin Templeton has disclosed the management cost for its proposed Ether spot ETF, and it’s essentially nonexistent.
In contrast to rates charged by international rivals that have already gone live, the Franklin Ethereum ETF would only charge investors 0.19% annually for storing Ether in its fund, according to a revised S-1 form filed with the Securities and Exchange Commission (SEC) on Friday.
Franklin stated that the sponsor’s fee is calculated daily at an annualized rate equivalent to 0.19% of the fund’s net asset value and that it must be paid at least quarterly in arrears in US dollars, in kind, or in any combination of these.
Not only that, but the fund has further pledged to forego sponsor fees on its initial $10 billion for the first six months following the fund’s launch.
The extremely low charge is similar to Bitcoin spot ETFs, which debuted in January and caused rival funds to engage in a fierce fee war only days before their products went live by crunching each other’s data. Nowadays, the majority charge less than 0.3%, and several, like VanEck and Fidelity, even provide short-term fee waivers.
At the time, Franklin also introduced a Bitcoin ETF, however it was largely outperformed by rivals in terms of assets and volume. This time, the asset manager has moved quickly to reduce its fee rate and get its costs down to almost nothing.
Eric Balchunas, a Bloomberg ETF analyst, tweeted on Friday, “To put things in perspective, the majority of ether spot ETFs in other countries or in other vehicles are >1%.” The bulk of fresh investor capital is going into the US ETF market because it is unique in its hardline nature.
Customers may find that a mere 1% difference can have a significant impact, as demonstrated by the Bitcoin ETFs. For instance, the Grayscale Bitcoin Trust (GBTC) has already had outflows totaling more than half of its Bitcoin since deciding to maintain a comparatively high charge of 1.5% in January.
Even though it had more than 600,000 BTC when it launched, BlackRock’s considerably less expensive fund has now surpassed it to become the largest Bitcoin ETF globally. Even while the demand for Bitcoin has increased over the course of the year, more costly Bitcoin ETFs in Canada and Europe have also suffered net withdrawals.
Last Monday, the SEC authorized 19-b4 applications for seven additional Ether spot ETFs in addition to Franklin. Within a few weeks, according to experts, the funds should begin trading on national securities exchanges.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
