The launch puts Franklin Templeton’s dividend-reinvestment design into the market: the funds begin with about 5% Bitcoin exposure, which dividends can increase over time.
The Franklin US Equity Bitcoin DRIP Index ETF (FBEQ) tracks an index built around 500 large-cap U.S. stocks. The Franklin US Innovation Bitcoin DRIP Index ETF (FIBT) follows a separate index of 100 innovation-focused companies. Each starts with about 95% in equities and 5% in Bitcoin exposure.
Under the index methodologies, regular and special dividends from portfolio companies go toward Bitcoin exposure after each stock’s ex-dividend date. The allocation takes effect at the next market open. Dividend proceeds remain in the funds’ strategy; shareholders do not receive Bitcoin.
The rules adjust the allocation if Bitcoin’s share rises. At a quarterly review, a share above 5% is reduced to 4.5%. A close above 20% triggers a reset to 4.5% after two trading days.
The ETFs use Bitcoin-linked exchange-traded products, futures and options to gain exposure without holding Bitcoin. FBEQ has an annual management fee of 0.09%, compared with 0.19% for FIBT.
The prospectuses warn investors they could lose money and cite Bitcoin price declines, theft, fraud, manipulation and trading-venue security failures as risks. The launch follows Franklin Templeton’s earlier plans for the two funds.
