Franklin Templeton files dividend-reinvestment Bitcoin ETFs

Franklin Templeton, the global asset manager overseeing more than $1.5 trillion, has filed with U.S. regulators to launch two exchange-traded funds that would automatically reinvest dividends from stock holdings into Bitcoin, marking a new hybrid approach to digital asset investing.

The proposed funds, filed with the Securities and Exchange Commission on Thursday, are the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF. They are expected to become effective as early as Sept. 1, 2026, pending regulatory approval. The products would track the VettaFi US LargeCap 500 Bitcoin DRIP Index and a related innovation-focused version.

Under the structure outlined in the filing, each fund would begin with a portfolio allocation of 95% U.S. large-cap equities and 5% Bitcoin exposure. Dividends generated by the stock holdings would be systematically reinvested into Bitcoin-linked investments rather than returned to investors as cash. The Bitcoin exposure could come through spot Bitcoin exchange-traded products, futures contracts, options, or other investment instruments.

Quarterly rebalancing rules would reduce Bitcoin allocations that exceed 5%...