Franklin Templeton has completed the final regulatory step before launching two Nasdaq-listed exchange-traded funds designed to turn dividends from U.S. stocks into recurring bitcoin purchases. The filings give investors the funds’ tickers, fees and portfolio rules ahead of a prospectus effective date of October 27.
According to Bitcoin Magazine, the $1.7 trillion asset manager filed Form 8-A with the U.S. Securities and Exchange Commission on October 22 to register the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF. Both funds are initially structured with 95% exposure to stocks and 5% to bitcoin.
How the dividend-to-bitcoin strategy works
The approach resembles a conventional dividend reinvestment plan, or DRIP, but with a different destination for the cash. Traditional DRIPs generally use a company’s dividend to purchase more shares of that same company. Franklin Templeton’s funds instead direct dividends from their stock holdings into bitcoin exposure.
For the Franklin US Equity Bitcoin DRIP Index ETF, which will trade under the ticker FBEQ, the underlying benchmark is the VettaFi US Large-Cap 500 Bitcoin DRIP Index. It contains the 500 largest U.S. companies by market capitalization and weights them according to float-adjusted market value.
As of September 30, the index held 499 stocks. The companies ranged in market value from $10.2 billion to $5.5 trillion, and the index had a concentration in information technology.
When one of the companies pays a regular or special dividend, the fund reinvests that cash in bitcoin at the market opening on the business day after the dividend’s ex-date. As dividends accumulate, the portfolio’s bitcoin exposure can therefore rise over time without the investor having to make individual purchases.
The fund does not require holders to open a cryptocurrency exchange account, manage a wallet or make their own custody arrangements. However, it does not hold bitcoin directly on-chain. Instead, it can obtain bitcoin exposure through exchange-traded products, including Franklin Templeton’s own spot bitcoin fund, as well as bitcoin futures, options and depositary receipts. Some of those investments may be made through a Cayman Islands subsidiary.
Exposure limits and the second fund
The 5% bitcoin allocation is not designed to grow without restrictions. At each quarterly rebalance, any bitcoin allocation above 5% is reduced to 4.5%. If bitcoin rises above 20% of the index between scheduled rebalances, the position is cut to 4.5% within two business days, with the proceeds returned to stocks.
Those rules mean the product is structured primarily as an equity fund with a bitcoin allocation, rather than as a dedicated bitcoin fund. Bitcoin’s share may increase as dividends are invested, but the fund has mechanisms to limit that exposure.
The second product, the Franklin US Innovation Bitcoin DRIP Index ETF, uses the same dividend-reinvestment mechanism. Its benchmark, the VettaFi US Innovation 100 Bitcoin DRIP Index, selects the 100 largest non-financial companies listed on the Nasdaq.
FBEQ will charge an annual expense ratio of 0.09% and has no 12b-1 fee. Franklin Advisory Services will manage the fund, while Franklin Templeton Institutional will serve as sub-advisor. Dina Ting, Hailey Harris, Joe Diederich and Basit Amin are listed as portfolio managers. The source material does not provide a ticker or expense ratio for the Innovation fund.
Franklin Templeton’s broader crypto push
The new ETFs build on Franklin Templeton’s existing digital-asset activity. The firm filed for a spot bitcoin ETF in September 2023 and launched that product, EZBC, in January 2024. In April, it acquired 250 Digital and established Franklin Crypto as an institutional digital-asset division.
The DRIP structure gives investors a way to add bitcoin exposure through the dividends generated by a stock portfolio. For example, an investor using a brokerage account to hold a broad U.S. equity strategy could use FBEQ to have those distributions directed toward bitcoin exposure rather than additional shares of the companies paying them.
The prospectus warns that investors can lose money and that bitcoin’s price volatility may affect the funds’ net asset values. The filings list October 27 as the effective date for the prospectus, marking the next stated milestone for the products.
Current market picture
Moneyiar market data recorded at 08:24 on October 24, 2026, shows Bitcoin at $80,682.9023, down 1.25% over 24 hours and 1.13% over seven days. Lighter was at $3.0921, down 9.84% in 24 hours and 3.62% over seven days. Decentraland stood at $0.08032, down 4.10% over 24 hours and 9.03% over seven days, while FUNToken was $0.008750, up 0.36% over 24 hours and down 0.40% over seven days.
