Fidelity to Turn Ethereum ETF into Yield-Generating Investment Product

Fidelity is preparing to transform its Fidelity Ethereum Fund (FETH) into an investment product that generates yield, according to an amended registration statement filed with the U.S. SEC.

The filing seeks permission to stake up to 100% of the fund's ETH holdings and distribute the resulting net rewards to shareholders through quarterly cash distributions.

FETH currently holds around $898 million in net assets, and under normal conditions, Fidelity could stake nearly all of its ETH while keeping enough available for redemptions, expenses, and other liquidity needs.

The proposed reward structure is straightforward: 85% of gross staking rewards would be retained by the fund, with the remaining 15% shared among Fidelity, custodians, and staking operators as fees. Net rewards would first cover fund expenses, and any amount left could be distributed to investors quarterly in cash.