EZET Review: Franklin Ethereum ETF

EZET fits investors who want ether exposure as a security and are content to leave storage to the fund’s service providers.

EZET holds ether so that its shares follow ether’s price, less expenses. It holds the ether itself and uses no futures contracts.

Shareholders own an interest in the trust. They can hold and trade that security but do not control the private keys to its ether.

Benchmark and How to Check Tracking

EZET values its ether using the CME CF Ether-Dollar Reference Rate – New York Variant, from CF Benchmarks. It sets a daily reference price aligned with 4:00 pm New York time.

Net asset value, or NAV, is the value of the trust’s assets after liabilities, divided by the number of shares. To check tracking, compare the fund’s NAV return with the benchmark over matching dates. Comparing a closing value with an ether quote from another hour introduces a timing difference that has nothing to do with fees.

A fall in ether’s market price can substantially reduce your EZET holding. The exchange listing and the Franklin Templeton name offer no protection against that decline.

Who Holds EZET’s Ether?

Coinbase Custody Trust Company is EZET’s ether custodian. The agreement keeps the fund’s ether segregated from Coinbase’s own assets.

Coinbase is liable where a loss results from its negligence, fraud or willful misconduct, and its terms on unauthorized account access are tied to the same standard. Liability remains subject to the agreement’s limits and exclusions.

Fund Structure and Regulatory Status

EZET is a Delaware statutory trust and is not registered under the Investment Company Act of 1940. Calling it an ETF does not give it the same regulatory framework as a fund registered under that act.

The sponsor fee is one part of what EZET costs. Buying and selling the shares adds costs of their own.

Applying 0.19% to a hypothetical $10,000 held at a constant value for a full year gives $19. Your costs move with the value of the holding, and trading costs come on top.

No fee waiver applies now.

EZET trades on Cboe BZX. Brokerage access varies by account and location. Confirm the fund’s full name and ticker in your account, and check whether fractional shares and your account type are supported.

Share Price and NAV

The share price can sit above NAV, called a premium, or below it, called a discount. When authorized participants create or redeem shares with the trust, the market price tends to move back toward NAV. Check the current bid and ask prices and any broker commission before you trade.

Ether Withdrawals and Retail Shares

Buying a share does not put ether into a wallet you control. Retail investors buy and sell shares on the market. Authorized participants create and redeem blocks of 50,000 shares with the trust. That process gives an ordinary shareholder no way to withdraw ether personally.

Holding ether in a personal wallet is one alternative for investors who need to make transfers or control the keys. Investors who want rewards on their ether can look at funds that stake it. Those funds add slashing risk, and part of the rewards goes to the sponsor and staking providers.

EZET vs ETHW

Bitwise’s Ethereum ETF (ETHW) charges almost the same fee and does not stake either.

The fees are almost identical. EZET’s Coinbase terms rest on ordinary negligence, while ETHW’s require gross negligence, which is why EZET rates higher despite being much smaller.