US-based ETF issuers Invesco and WisdomTree have cut trading fees on their European exchange-traded funds by 60% in a bid to join the spurring war for market share by international ETF providers.
Invesco and WisdomTree, currently the 6th and 10th largest spot Bitcoin ETF issuers in the U.S., are the latest providers to revise their service fees. Invesco filed to change its fees from 0.99% to 0.39% on its European-listed bitcoin exchange-traded products, and WisdomTree also cut its price from 0.99% to 0.35%. These changes are expected to take effect by the end of the month.
This aggressive fee-cutting initiative comes as a response to the heightened competition in the wake of the recent approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC). A day before the U.S. SEC’s approval, several of the new ETF providers updated their S-1 filings, reviewing their fees and slashing prices in preparation for the approval and positioning themselves to grab a portion of the spot Bitcoin market in the U.S.
The trend of fee reductions, as an FT report suggests, is beginning to extend to European and Canadian markets. Prior to the ETF approval, investors typically considered ETFs issued in Canadian and European markets. However, the recent introduction of ETFs in the U.S. has given American issuers a stronger position against their European and Canadian counterparts.
Gary Buxton, Invesco’s Head of ETFs for Europe, Africa, Asia Pacific, and the Middle East, explained in an interview with Financial Times that the launch of the new ETFs in the U.S. resulted in a significant decline in the market for Europe and the fees reduction played a prominent role.
It is worth noting that the landscape for exchange-traded products (ETPs) differs significantly between the U.S. and Europe. In Europe, ETPs take the form of Exchange-Traded Notes (ETNs), where investors hold debt securities, while in the U.S., ETF holders own a share of the ETF’s underlying assets. Thus, investors seeking to venture into the asset class will need to have certain foundational knowledge, even though ETNs offer tax efficiency and tight tracking.
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