Invesco and WisdomTree cut fees on European ETPs as price war reaches Europe
The spot Bitcoin exchange-traded fund (ETF) fee war has now reached Europe just weeks after asset managers got the United States Securities and Exchange Commission (SEC) approval to list their respective ETFs on stock 7c5091a6-e9b3-4973-a591-2d9fadf15325.
Before the approval on Jan. 10, all 11 applicants updated their S-1 form multiple times to lower their ETF fees . Now, a similar trend is being observed among European listed exchange-traded products (ETPs).
Two leading asset managers, Invesco and WisdomTree, slashed fees on their European-listed ETPs by more than 60%. The $137 million Invesco Physical Bitcoin ETP will see a charge reduction from 0.99 percent to 0.39 percent, while the $325 million WisdomTree Physical Bitcoin ETP will see a cost reduction from 0.95 percent to 0.35 percent.
In Europe, digital asset exchange-traded products are structured as exchange-traded notes (ETN) rather than funds. ETN investors own debt security, whereas ETF shareholders own a piece of the fund’s underlying assets.
The reason for the significant cut down in fees is attributed to the increased competition and availability of multiple ETFs in the U.S., one of the leading financial markets. Earlier U.S.-based investors had to look toward Canadian and European-based ETPs for investment, however, with the approval of 11 ETFs in the U.S., the demand for European ETPs from U.S. investors has come down significantly.
In an interview with Financial Times, Gary Buxton, Invesco head of ETFs for Europe, said that “multiple” ETFs in the U.S. lowered their fees to find the “new equilibrium between supply and demand,” resulting in considerably lower prices than existing ETPs in Europe.
Compared to the European ETPs, the U.S.-based Bitcoin ETFs are more liquid and available on a single exchange platform, making them more accessible to European investors. The newly launched spot Bitcoin ETFs in the U.S. have attracted billions in trading volume from day one and even after two weeks these ETFs continue to trade billions in daily volume.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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