Franklin Templeton Files New Bitcoin DRIP ETFs That Turn Stock Dividends Into BTC

CN
7 hours ago

Key Takeaways:

    • Franklin Templeton seeks SEC effectiveness for two funds combining stocks and bitcoin exposure.
    • Instead, dividend proceeds would be routed into bitcoin-related holdings over time.
    • Investors could see growing cryptocurrency allocations while retaining diversified equity exposure.
  • Franklin Templeton ETF Trust has amended its existing Securities and Exchange Commission (SEC) registration framework to add two proposed exchange-traded funds (ETFs) that would combine U.S. equity exposure with a predetermined methodology for allocating bitcoin through dividend reinvestment.

    The June 18 filing outlines the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF.

    Both products are designed to track indexes developed by VettaFi, an index provider and financial data company. The indexes begin with a 95% allocation to equities and a 5% allocation to bitcoin exposure, while within the index methodology, dividend proceeds are systematically directed into bitcoin-related investments.

    For both products, the filing states:

    “The underlying index includes an allocation to bitcoin that is achieved by systematically reinvesting dividends from the equity securities in the underlying index into bitcoin.”

    The first proposed fund would track the VettaFi US Large-Cap 500 Bitcoin DRIP Index, which is built from a universe of the 500 largest U.S. companies by market capitalization. Eligible securities are weighted using a float-adjusted methodology and remain subject to concentration limits that cap individual holdings and larger aggregate positions. As of April 30, 2026, the underlying index contained 498 securities.

    Meanwhile, the Franklin US Innovation Bitcoin DRIP Index ETF would track the VettaFi US Innovation 100 Bitcoin DRIP Index. That benchmark draws from the 100 largest Nasdaq-listed U.S. companies, excluding firms categorized as finance companies. The index also applies liquidity, trading volume, and public float screens before constituent selection.

    Both funds would access bitcoin markets through a mix of instruments such as crypto-linked exchange-traded vehicles, futures, options, and other securities tied to the price of bitcoin. The registration documents also permit the use of a wholly owned Cayman Islands subsidiary to hold certain digital asset exposures when appropriate.

    According to the prospectus, the proposed ETFs are designed to track their respective benchmarks using a passive approach, either by holding all index constituents or by employing a sampling method intended to closely mirror index performance.

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