Virtually all of the soon-to-be-listed Ethereum exchange-traded funds (ETFs) are temporarily waiving or discounting fees as rivalries among issuers heat up ahead of next week’s anticipated listings, according to documents filed with United States regulators.
The promotional discounts range from full waivers to roughly 50% fee reductions, and vary in length from six months to a year. Some discounts also expire once ETFs pull a certain amount of assets under management (AUM).
In total, seven out of 10 proposed spot ETH ETFs are touting fee cuts. Grayscale Ethereum Trust (ETHE) and Invesco Galaxy Ethereum ETF are opting out of the fee war. The other outlier — ProShares Ethereum ETF — has lagged behind peers in the registration process and is not expected to list next week.
Issuers filed the final round of amended S-1 registrations for nine proposed spot ETH ETFs on July 17 after the U.S. Securities and Exchange Commission (SEC) reportedly tipped July 23 as the listing day for the publicly traded funds. The latest filings set out management fees for each of the funds.
Related: BlackRock sets spot Ether ETF fee at 0.25% amid rush of S-1 filings
Franklin Templeton’s Franklin Ethereum ETF (EZET) has emerged as the fee race’s frontrunner. Management fees are fully waived for one year, or until the fund hits $10 billion in AUM. Franklin Ethereum ETF’s baseline fee of 0.19% is also the lowest of the bunch.
Fees for the other spot Ether ETFs range from 0.20% to 0.25%, with one notable exception. Grayscale Ethereum Trust (ETHE) — which has traded under a different fund structure since 2017 and is now preparing to convert to an ETF — has opted to stick with its longstanding management fee of 2.5%.
Grayscale is also launching a new fund—Grayscale Ethereum Mini Trust—with a more competitive fee structure. For 12 months, or until the fund's AUM hits $2 billion, Grayscale is discounting the Mini Trust’s 0.25% baseline fee to 0.12%.
Grayscale drew criticism on July 17 for not setting lower fees on its legacy fund, ETHE, which currently has nearly $10 billion in AUM, with some industry analysts saying Grayscale also set fees on the new Mini Trust too high.
Grayscale Ethereum Mini Trust is “[c]heap but not sure cheap enough to move the needle (as most are cheaper and brand name BlackRock is same fee) to attract organic flows,” Bloomberg ETF Analyst Eric Balchunas posted on the X platform.
Grayscale announced plans to convert 10% of shares in the legacy fund to Mini ETF shares and distribute them to existing investors. A person familiar with the matter said the distribution will offer existing shareholders—some of whom have been holding since 2017 — a tax-advantaged way of swapping out of the legacy fund and into the new ETF.
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