American multinational investment firm Franklin Templeton has submitted an amended S-1 application for its proposed spot Ether exchange-traded fund (ETF) product. This marks the initial disclosure of fees to investors among the applicants. According to the filing with the United States Securities and Exchange Commission on May 31, the sponsor fees accrue daily at an annualized rate of 0.19% of the net asset value of the Fund. Bloomberg ETF analyst Eric Balchunas highlighted Franklin Templeton's move as the starting point of the ETH ETF fee competition, stating that it sets the stage for a potential fee war in the ETF space. The disclosed sponsor fees are crucial for investors who commonly opt for ETFs with lower fees.

Franklin Templeton's proactive approach contrasts with other contenders such as VanEck, Invesco, and Galaxy, who also filed amended S-1 applications on the same day but did not reveal their sponsor fees. These applications are mandatory registration statements that companies must submit to the SEC, outlining detailed information about the company and the securities they plan to offer. While Balchunas noted the absence of fees in the new S-1s by other firms, indicating a temporary pause in the fee competition, the significance of disclosed fees remains paramount in the ETF landscape.

The concept of 'fee wars' in the ETF sector gained momentum before the launch of spot Bitcoin ETFs in January, with issuers making frequent S-1 filing amendments for fee adjustments. Some issuers even opted to waive fees entirely to enhance competitiveness. Bitwise notably waived all fees on its spot Bitcoin ETF for the initial six months of trading and up to the first $1 billion in assets.

In parallel developments, Grayscale Investments and BlackRock submitted amendments in late May, hinting at a potential Ethereum ETF launch in June. Balchunas expressed optimism about the likelihood of a spot Ether ETF rollout by the end of June, emphasizing the evolving dynamics within the ETF industry and the strategic moves by major players like BlackRock.

Image Source: James Seyffart