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Franklin Templeton, which manages $1.8 trillion in assets, has filed with the U.S. Securities and Exchange Commission (SEC) for the registration of two exchange-traded funds: the Franklin US Equity Bitcoin DRIP Index ETF (FBEQ) and the Franklin US Innovation Bitcoin DRIP Index ETF (FIBT).
If approved, these funds will trade on the Nasdaq stock exchange (NDAQ). The funds are scheduled to be registered on October 27, although the exact start date for trading has not yet been announced. The FBEQ tracks the VettaFi U.S. Large-Cap 500 Bitcoin DRIP Index, which includes the 500 largest publicly traded U.S. companies, while FIBT monitors the VettaFi US Innovation 100 Bitcoin DRIP Index, comprising the 100 largest non-financial companies traded on Nasdaq.
DRIP stands for Dividend Reinvestment Plan. The distinctive feature of these funds is that they allocate 95% of their assets to the stocks of selected companies and 5% to Bitcoin. All regular and special dividends paid by these companies will be directed toward purchasing Bitcoin. Purchases will be executed at the market open on the day following the ex-dividend date—the first day shares trade without the right to receive the declared dividends. This mechanism allows the fund to regularly acquire Bitcoin using dividends from major U.S. companies, meaning investors do not need to open an exchange account, create a wallet, or store cryptocurrency themselves.
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If, during quarterly rebalancing, the Bitcoin allocation exceeds 5%, it will be adjusted down to 4.5%. If the Bitcoin share exceeds 20% between rebalancing periods, it will still be trimmed to 4.5%.
Franklin Templeton first filed for these funds in June, but the SEC registration date has been postponed multiple times. The latest application was submitted on Friday, October 23, the same day investors withdrew $635.4 million from spot Bitcoin ETFs. Franklin Templeton also manages another Bitcoin-linked fund, the Franklin Bitcoin ETF (EZBC). According to SoSoValue, assets under management in EZBC stood at $467 million on October 23.
Last year, Franklin Templeton launched the first European UCITS SICAV tokenized fund based on the Stellar blockchain. In June, Franklin Templeton CEO Jenny Johnson noted that large financial institutions are in no hurry to move to public blockchains in order to preserve their income from commission fees.
