Key Takeaways
- • Franklin Templeton's Ethereum ETF (EZET) charges a 0.19% expense ratio (19 basis points), with full fee waivers on the first $10 billion in assets under management, positioning it competitively in an emerging ether ETF fee war where competitors range from 0.19% to 2.5%.
- • EZET uses Coinbase Custody Trust Company as its ether custodian, introducing custodial concentration risk—a material consideration given that security breaches or operational failures at a single custodian could impact all fund assets.
- • The fund tracks the CME CF Ether-Dollar Reference Rate (New York Variant) benchmark and does not directly hold ether; instead, it replicates ether price performance, creating a synthetic exposure structure distinct from direct cryptocurrency ownership.
- • Since inception on July 23, 2024, EZET has delivered negative returns of -25.44% (NAV basis) as of May 31, 2026, reflecting significant underperformance over the fund's initial operational period.
- • EZET holds approximately 20,464.32 ether across 2.7 million shares outstanding as of July 2, 2026, with daily trading volume of 21,895 shares and a 20-day average volume of 52,095 shares, indicating modest liquidity relative to broader ETF markets.
Summary
Franklin Templeton's Franklin Ethereum ETF (EZET), listed on Cboe BZX Exchange, represents the firm's entry into the spot ether ETF market with a competitive fee structure designed to capture assets during the initial wave of cryptocurrency-linked investment products. The fund charges a gross sponsor fee of 0.19% annually, placing it at the lower end of the ether ETF fee spectrum, where competing products from BlackRock, Fidelity, Invesco, and Bitwise cluster around 0.25% with outliers reaching 2.5%. Franklin Templeton has committed to waiving management fees on the first $10 billion in assets, a strategic move to accelerate asset accumulation in a crowded marketplace.
The fund's custody arrangement with Coinbase Custody Trust Company represents a significant structural consideration for institutional investors. This single-custodian model concentrates operational and security risks; any material breach, technical failure, or regulatory action affecting Coinbase Custody could directly impact the entire fund's ether holdings. Investors should evaluate Coinbase's custody infrastructure, insurance coverage, and operational redundancy protocols as core due diligence elements, particularly for larger allocation decisions.
EZET employs an index-tracking methodology based on the CME CF Ether-Dollar Reference Rate (New York Variant), meaning the fund does not directly hold ether on its balance sheet but instead seeks to replicate price movements through a benchmark-tracking mechanism. The fund incurs transaction costs, including Ethereum network fees, when executing ether sales to meet redemptions or cover operating expenses—costs borne by shareholders and embedded in performance calculations.
Performance data through May 31, 2026, reveals material headwinds: the fund has delivered a -25.44% return since inception (July 23, 2024) on a net asset value basis, with a -21.88% one-year return. These results reflect both the broader cryptocurrency market downturn and the impact of fee waivers on reported performance. Total net assets stood at $32.3 million as of the last reported period, with 20,464.32 ether held across 2.7 million shares outstanding, translating to approximately 378.90 ether per share basket as of July 2, 2026.
Trading liquidity remains modest, with daily volume averaging 21,895 shares and a 20-day average volume of 52,095 shares. This liquidity profile may present operational challenges for large institutional positions seeking to establish or exit positions efficiently without material market impact.
The fund's custody arrangement with Coinbase Custody Trust Company represents a significant structural consideration for institutional investors. This single-custodian model concentrates operational and security risks; any material breach, technical failure, or regulatory action affecting Coinbase Custody could directly impact the entire fund's ether holdings. Investors should evaluate Coinbase's custody infrastructure, insurance coverage, and operational redundancy protocols as core due diligence elements, particularly for larger allocation decisions.
EZET employs an index-tracking methodology based on the CME CF Ether-Dollar Reference Rate (New York Variant), meaning the fund does not directly hold ether on its balance sheet but instead seeks to replicate price movements through a benchmark-tracking mechanism. The fund incurs transaction costs, including Ethereum network fees, when executing ether sales to meet redemptions or cover operating expenses—costs borne by shareholders and embedded in performance calculations.
Performance data through May 31, 2026, reveals material headwinds: the fund has delivered a -25.44% return since inception (July 23, 2024) on a net asset value basis, with a -21.88% one-year return. These results reflect both the broader cryptocurrency market downturn and the impact of fee waivers on reported performance. Total net assets stood at $32.3 million as of the last reported period, with 20,464.32 ether held across 2.7 million shares outstanding, translating to approximately 378.90 ether per share basket as of July 2, 2026.
Trading liquidity remains modest, with daily volume averaging 21,895 shares and a 20-day average volume of 52,095 shares. This liquidity profile may present operational challenges for large institutional positions seeking to establish or exit positions efficiently without material market impact.
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