As ETH ETF Launch Date Nears, Issuers Are Indulging in a Fee War

Industry insiders broke the news of the SEC mentioning July 23 as the date that ETH ETFs go live on US exchanges. With that date nearing, ETF issuers have begun offering discounts on their mentioned fees to attract high inflows from the get-go, with Franklin Templeton’s EZET fund taking the lead in the discount race.

Franklin Templeton has waived the fund’s management fee for the first year or until it hits $10 billion in AUM (assets under management). Even then, the fee remains the lowest out of the ETF bunch at just 0.19% until the conditions for it to start charging its investors are met. Franklin Templeton’s EZET ETF is one of the seven funds that will offer discounts for investors.

Two other funds, out of the nine approved by the SEC, have not mentioned discounts. Grayscale and Invesco Digital are two that will not provide fee reductions. ProShares is yet to register with the SEC and will not launch its ETH ETF on the expected launch date. Fee details for its fund will be revealed when it moves forward with its registration process.

Nine out of ten issuers filed their S-1 applications for the final time with the SEC, refining them according to the regulator’s instructions. Those applications comprised details regarding the fees and discounts, if any. Most issuers have set fees between 0.20 and 0.25%. Grayscale has set its ETF management fee at a high 2.5% beyond not providing discounts.

It already offered ETH ETFs through a different OTC fund, the Ethereum Trust Fund (ETHE), since 2017, which operates with the same fee. Grayscale will convert this fund to a new one regulated by the SEC. Grayscale will also launch another ETH ETF, called the Mini Trust, with a fee of 0.25%. The Mini Trust will offer discounts, reducing the 0.25% fee to 0.12% for the first year or until the fund hits $2 billion AUM.