Franklin Templeton readies ETFs that convert stock dividends into Bitcoin

The funds track indexes maintained by VettaFi, starting with a 95% allocation to equities and 5% to Bitcoin-related vehicles such as futures, options, and exchange-traded products. According to the October 22 SEC filing, the strategy applies to both regular and special dividends, which are reinvested on the trading day following the ex-dividend date. To maintain risk parameters, the portfolios undergo quarterly rebalancing; should the Bitcoin weight exceed 5%, it is reset to 4.5%. An absolute ceiling of 20% acts as a circuit breaker, triggering an automatic reduction if market volatility pushes the digital asset share beyond that limit.

Management fees are set at 0.09% for the Franklin US Equity Bitcoin DRIP Index ETF and 0.19% for the Franklin US Innovation Bitcoin DRIP Index ETF. While these filings confirm the registration of securities on Nasdaq, Franklin Templeton has not yet disclosed an official trading start date. The firm, which already maintains existing crypto-focused products, will utilize a Cayman Islands-based subsidiary to manage the Bitcoin-linked derivatives, highlighting a shift toward hybrid investment structures that blend established stock market indices like the S&P 500 or Nasdaq 100 with the speculative growth potential of cryptocurrency.