Franklin Ethereum ETF

What they do

The Trust issues Shares of the Franklin Ethereum ETF, which represent fractional undivided beneficial interest in the Fund. The Fund holds ether and seeks to reflect its price performance before expenses, without using leverage or derivatives. Creation and redemption of Shares occur only in blocks of 50,000 (Creation Units) by Authorized Participants, in exchange for cash. The Sponsor, Franklin Holdings, LLC, does not actively manage the ether holdings.

Revenue drivers

• Sponsor's Fee — The Fund's only ordinary recurring expense is the Sponsor's fee, accrued daily at 0.19% of net asset value and payable quarterly in U.S. dollars. This fee is the primary source of revenue for the Sponsor, who assumes the Fund's ordinary operating expenses.

Recent performance

For fiscal year 2026 (ended March 31, 2026), the Trust reported a net loss of $8.1 million and operating cash flow of -$28.7 million. As of March 31, 2026, total assets were $42.2 million, with total liabilities of $6,778, and shareholder equity of $67.6 million; cash and equivalents were zero. These figures indicate a relatively small asset base and ongoing operational losses.

Strategy

The Fund is designed as a passive investment vehicle, not actively managed, and does not utilize leverage or derivatives. The Sponsor aims to provide a cost-effective alternative to direct ether investment, removing operational burdens. The Fund commenced operations on July 23, 2024, and continues to offer Shares continuously through Authorized Participants. The Sponsor may waive fees at its discretion.

Risks

• Ether price volatility — The value of Shares is directly tied to the price of ether, which has extreme volatility and could lose all or substantially all of its value.
• Digital asset custody risk — Ether is a bearer instrument; loss, theft, or compromise of private keys could result in permanent loss of the Fund's assets.
• Regulatory and network risk — Smart contract problems, governance changes, or forks on the Ethereum network could reduce demand for ether, impacting Share value.
• Competition — Emergence or growth of alternative digital assets or competing ether products could negatively affect demand for ether and the Fund's viability.

Outlook

The Fund's financial statements reflect a net loss for the year, but management does not provide specific forward-looking guidance aside from typical cautionary language. The Sponsor continues to operate the Fund as a passive vehicle, with expectations that expenses will be covered by the Sponsor's fee. The Fund's future performance depends on ether price movements and market adoption.