Invesco, WisdomTree Slash Fees on European ETPs

Invesco and WisdomTree have significantly reduced fees for their European-listed ETFs which aims to compete with the ETFs in the U.S.

Just a few weeks after the United States Securities and Exchange Commission (SEC) gave its approval for Bitcoin exchange-traded funds (ETFs) in the country, the fee battle for spot Bitcoin exchange-traded funds (ETFs) has already reached Europe.

Before the approval on January 10, several applicants made repeated updates to their S-1 files to reduce the fees associated with their exchange-traded funds.

Currently, exchange-traded products (ETPs) listed on European exchanges exhibit a trend comparable to the past. Invesco and WisdomTree, two of the most prominent asset managers in the world, have reduced the costs associated with their European-listed exchange-traded funds by more than sixty percent.

Invesco will reduce the fee for its $137 million Physical Bitcoin ETP from 0.99% to 0.39%, while WisdomTree will reduce the fee for its $325 million Physical Bitcoin ETP from 0.95% to 0.35%.

Invesco reductions are expected to take effect next year. Exchange-traded products (ETPs) representing digital assets are structured as exchange-traded notes (ETNs) in Europe, rather than being organized as funds.

Investors in exchange-traded notes (ETNs) own debt securities, whereas shareholders in exchange-traded funds (ETFs) control a portion of the fund’s underlying assets.

Increased competition and availability of various exchange-traded funds (ETFs) have led to a significant reduction in fees in the United States, one of the leading financial markets.

In the past, investors from the United States were required to hunt for investment opportunities in exchange-traded funds (ETFs) based in Canada and Europe.

However, with the approval of 11 spot BTC ETFs in the United States, the demand for European ETFs from investors in the United States has considerably dropped.

Gary Buxton, who is the head of exchange-traded funds (ETFs) for Europe at Invesco, provided an interview with the Financial Times in which he stated that many ETFs in the United States have reduced their fees to reach the “new equilibrium between supply and demand.”

This has resulted in lower prices than those of existing ETPs in Europe. Bitcoin exchange-traded funds (ETFs) established in the United States are more liquid and available on a single exchange platform than their European counterparts.This makes them more accessible to investors in continental Europe.

Since the first day of trading, the newly introduced spot Bitcoin exchange-traded funds (ETFs) in the United States have attracted billions of dollars in trading activity, and even after two weeks, they continue to trade billions of dollars in daily volume.