Franklin Templeton has announced the launch of its new Franklin Ethereum ETF (EZET), providing investors with a regulated way to gain exposure to ether (ETH) through a traditional exchange-traded fund structure. The fund began trading on the Cboe BZX Exchange and aims to track the performance of ether's market price, minus fund expenses.
What Is the Franklin Ethereum ETF (EZET)?
The Franklin Ethereum ETF is a spot ether ETF, meaning it directly holds ether. It is designed to reflect the price performance of ETH and is structured to fit seamlessly into conventional investment portfolios. With a management fee of 0.19%, Franklin Templeton has committed to waiving all fees until January 31, 2025, for the first $10 billion in assets under management.
This new offering builds on the success of Franklin Templeton’s earlier spot bitcoin ETF, EZBC, which launched in January. EZET is part of the firm’s broader Digital Assets and ETF platforms, aimed at bridging traditional finance with the growing digital asset ecosystem.
Benefits of Investing in a Spot Ethereum ETF
A spot Ethereum ETF offers several advantages for investors looking to gain exposure to digital assets:
- Regulated Structure: Investors can buy and sell shares through traditional brokerage accounts without needing to manage private keys or navigate crypto exchanges.
- Transparency: As a publicly traded fund, it offers regular reporting and compliance with U.S. securities regulations.
- Portfolio Integration: It allows ETH exposure within familiar investment vehicles like IRAs or taxable investment accounts.
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Franklin Templeton’s Role in Digital Assets
Franklin Templeton has been actively involved in the digital asset space since 2018. The firm operates blockchain validators, develops technology solutions, and maintains a dedicated research team focused on tokenomics and market trends.
Roger Bayston, Head of Digital Assets, emphasized Ethereum’s role in Web3 innovation, citing smart contracts and the Ethereum Virtual Machine as foundational technologies that continue to drive the ecosystem forward.
The company’s U.S. ETF platform, established in 2016, now includes over 100 ETFs globally, with total assets under management exceeding $27 billion as of mid-2024.
Understanding the Risks
Like all investments, the Franklin Ethereum ETF carries certain risks. It is important to understand these before investing:
- Market Volatility: The price of ether can be highly volatile, which may lead to significant fluctuations in the value of the fund.
- Regulatory Uncertainty: Evolving regulations around digital assets could impact the fund’s performance and legality.
- Non-Staking Model: The fund does not stake its ether holdings, meaning investors will not earn staking rewards.
- Concentration Risk: The fund is not diversified and holds only ether and cash, making it more susceptible to market swings.
Investors are encouraged to read the fund’s prospectus carefully and consider their risk tolerance and investment goals.
How EZET Fits into a Broader Investment Strategy
For those interested in digital assets, EZET offers a convenient entry point. It may be suitable for investors who:
- Want exposure to ether without direct ownership.
- Prefer the security and regulatory oversight of a traditional ETF.
- Are building a long-term portfolio that includes digital assets.
However, it should not serve as a complete investment plan. Diversification across asset classes remains a key principle of sound investing.
Frequently Asked Questions
What is the Franklin Ethereum ETF (EZET)?
The Franklin Ethereum ETF is a spot exchange-traded fund that holds ether directly. It aims to track ETH’s market performance and is traded on the Cboe BZX Exchange under the ticker EZET.
What are the fees for EZET?
The fund has a management fee of 0.19%. However, Franklin Templeton is waiving all fees until January 31, 2025, for the first $10 billion in assets.
Can I stake my ETH through this ETF?
No. The fund does not participate in staking, so investors will not receive staking rewards.
Is EZET suitable for all investors?
No. The fund is concentrated in one digital asset and carries higher volatility and risk. It is not intended as a standalone investment solution.
How does EZET differ from holding ether directly?
EZET offers a regulated, custodial structure without the technical challenges of self-custody. However, it does not provide direct ownership of ETH.
Where can I buy shares of EZET?
Shares can be purchased through most U.S. brokerage accounts that offer ETF trading.