Franklin Templeton, an asset management giant, has started a fee competition for spot Ethereum (ETH) exchange-traded funds (ETFs) by being the first to reveal its management fees in a recent S-1 filing. This American investment company stated in its final S-1 form submission to the U.S. Securities and Exchange Commission (SEC) that the sponsor fees will be charged daily at an annual rate of 0.19% of the fund’s net asset value.

A Key Competitive Element

This move was highlighted by Bloomberg ETF analyst Eric Balchunas, who noted that this sets the stage for other Ethereum ETF applicants to reveal their fees. Sponsor fees are critical for ETFs because investors generally prefer funds with lower costs. Franklin Templeton’s fee announcement aligns with the rate for spot Bitcoin ETFs, suggesting that this fee is permanent and not a temporary promotion.

Competitors Yet to Reveal Fees

While Franklin Templeton disclosed its fees, other applicants like VanEck, Invesco, and Galaxy did not reveal their fees, even though they also submitted updated S-1 filings on the same day. These S-1 filings are closely watched because they provide detailed information about the company and the securities they plan to offer.

Balchunas mentioned that the fee battle is temporarily paused since no other fees were disclosed in the latest S-1 filings. However, he stressed the significance of fee competition, recalling the "fee wars" before the launch of spot Bitcoin ETFs. During that time, some issuers waived fees to attract investors, with Bitwise offering no management fees for the first six months and the first $1 billion in assets.

Future Fee Disclosures Expected

Grayscale Investments and BlackRock also updated their applications to the SEC recently. Balchunas sees this as a positive sign, expecting more fee disclosures and adjustments soon.

Possible June Launch for Spot Ethereum ETFs

Experts anticipate that issuers will fine-tune their responses to SEC comments in another round of amendments. They see the launch of spot Ethereum ETFs by the end of June as a realistic possibility. This suggests that at least one spot Ethereum ETF could start trading in the U.S. by the end of June, which would be a significant event for the cryptocurrency market.

In conclusion, Franklin Templeton’s early fee disclosure has sparked a competitive atmosphere among potential spot Ethereum ETF issuers. As other companies reveal their fees, investors can expect a clearer picture of the cost landscape for these new financial products.