Franklin Templeton Lists Two Bitcoin DRIP ETFs on Nasdaq

Franklin Templeton has formally launched a pair of exchange-traded funds that channel stock dividends into bitcoin. The Franklin U.S. Equity Bitcoin DRIP Index ETF (FBEQ) and the Franklin U.S. Innovation Bitcoin DRIP Index ETF (FIBT) are now trading on Nasdaq.

The rollout marks the final regulatory milestone after Franklin submitted registration documents to the Securities and Exchange Commission on October 22. The initial filings for both funds appeared in June without tickers or fee details; those specifics have now been disclosed.

How the funds work

FBEQ follows the VettaFi U.S. Large-Cap 500 Bitcoin DRIP Index, which comprises the 500 largest U.S. companies by market capitalisation, weighted by float-adjusted market cap. As of September 30, the index contained 499 stocks with individual market caps from $10.2 billion to $5.5 trillion, with the largest weighting in information technology.

At launch, the index allocates 95% to equities and 5% to BTC. Any dividend payment — regular or special — is reinvested into BTC at the market open on the day following the ex-date. The bitcoin portion of the portfolio rises with each dividend.

In a standard DRIP, cash dividends buy additional shares of the paying company. Franklin’s variant directs that cash into BTC instead. For investors, the dividend stream from large U.S. corporations becomes a recurring bitcoin purchase, requiring no exchange account, wallet or custody arrangement.

The bitcoin allocation is capped. At each quarterly rebalance, any portion exceeding 5% is reduced to 4.5%. Should BTC surpass 20% of the index between rebalances, it is cut back to 4.5% within two business days, with the proceeds flowing back into equities.

The outcome is an equity fund with a bitcoin component, distinct from a pure BTC fund.

The fund does not hold BTC directly on-chain. It gains exposure through bitcoin exchange-traded products — including Franklin’s own spot fund — and through bitcoin futures, options or depositary receipts, in some cases via a Cayman Islands subsidiary.

FBEQ has a 0.09% expense ratio and no 12b-1 fee. Franklin Advisory Services serves as manager, with Franklin Templeton Institutional as sub-advisor.

Bitcoin as a mature, investable asset

“Bitcoin has matured as an investable asset, supported by deeper market infrastructure, broader adoption and a growing understanding of the role it can play in portfolios,” said Dina Ting, SVP and Head of Index Investments at Franklin Templeton. “A systematic approach to building exposure is one way to address this next stage of adoption.”

Jeff Masom, Head of U.S. Distribution and Global Wealth Management Private Markets, described the funds as a novel method of combining U.S. equities and bitcoin via a differentiated index strategy.