Global asset management company Franklin Templeton has filed for two exchange-traded funds that will automatically direct stock dividends to Bitcoin. According to the application documents, the funds can be opened for processing as early as September 1, 2026, if the necessary approvals are received.
Structure and operation of funds
The funds included in the application are listed as Franklin US Equity Bitcoin DRIP Index ETF and Franklin US Innovation Bitcoin DRIP Index ETF. DRIP is traditionally known as a method of reinvesting dividends. In this structure, dividends will be directed to Bitcoin accumulation, not to repurchasing shares.
According to the filing documents, stock dividends in the funds will not be invested directly back into securities, but instead will be systematically transferred into Bitcoin-linked instruments.
The funds will track the VettaFi US Large Cap 500 Bitcoin DRIP Index and a similar innovation-focused index. Indirect access to Bitcoin will be provided through exchange investment products, futures contracts, options and similar instruments linked to the crypto asset.
Mini glossary: A DRIP is a method that automatically reinvests dividends rather than receiving them in cash. ETP is the general name used for investment products that are traded on the stock exchange and track the price of an asset.
In the initial allocation of the funds, 95% of the assets will be in large-scale US stocks and 5% in Bitcoin. If the Bitcoin rate rises above 5% during quarterly rebalancing periods, the share will be reduced to 4.5%. In the period between the rebalancing dates, a 20% upper limit will be applied for Bitcoin weight.
| Pen | Detail |
|---|---|
| Initial distribution | 95% US stock, 5% Bitcoin |
| Quarterly balancing | Bitcoin share above 5% will be reduced to 4.5% |
| Interim period upper limit | 20% for Bitcoin |
| Possible start date | September 1, 2026 |
Stock basket spreads over a wide base
As of April 30, there were approximately 498 companies in the underlying stock index. The market values of these companies ranged between $7.5 billion and $4.9 trillion. Thus, it appeared that the funds aimed to create a gradual Bitcoin position through dividends while offering investors access to a broad basket of US stocks.
The last link of the crypto strategy
The new filing marks one of the latest steps in Franklin Templeton’s broader strategy in the crypto asset space. The company is known as a well-established asset manager operating globally. Franklin Templeton’s spot Bitcoin ETF, EZBC, reached a net asset size of $358.9 million and recorded total inflows of $329.6 million.
The application was considered as a new step that strengthens Franklin Templeton’s approach to bring together traditional investment products and digital asset tools under the same roof.
In May, the company collaborated with Payward, the parent company of the Kraken exchange, to explore new methods for tokenizing traditional investment products. At the beginning of this month, it was announced that the tokenized money market fund BENJI and some other products were integrated into the MoonPay Trade infrastructure. This arrangement aims to enable corporate users to convert USDC and USDT stablecoins into Franklin Templeton’s tokenized funds via MoonPay.
