Franklin Templeton Advances Plan for Bitcoin Dividend Reinvestment ETFs

The two proposed funds, the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF, will trade under the tickers FBEQ and FIBT. While the SEC filing on October 22 confirmed the completion of their registration under the Securities Exchange Act of 1934, Franklin Templeton has yet to announce an official launch date.

Both ETFs will utilize a dividend reinvestment strategy to build Bitcoin holdings. Portfolios will initially consist of 95% US equities and 5% Bitcoin-related investments. As companies within the underlying indexes pay dividends, those proceeds will be directed toward increasing the fund's Bitcoin exposure. The management fee for both products is set at 0.09%.

To manage risk, the firm has implemented strict allocation caps. During quarterly rebalancing, any Bitcoin weight exceeding 5% will be trimmed back to 4.5%. Furthermore, if exposure exceeds 20% between scheduled reviews, the fund will automatically reset the allocation to 4.5% within two business days. The funds will track indexes developed by VettaFi, with the Franklin US Equity fund drawing from 500 large-cap US companies and the Innovation fund selecting 100 firms from a Nasdaq-based innovation universe.

This expansion follows a series of digital asset initiatives by the firm, including the integration of its BENJI tokenized money market fund into institutional trading platforms. Franklin Templeton currently operates the Franklin Bitcoin ETF (EZBC), which has recorded $335 million in cumulative net inflows.