The Franklin U.S. Equity Bitcoin DRIP Index ETF and the Franklin U.S. Innovation Bitcoin DRIP Index ETF each hold a basket of U.S. stocks, a VettaFi U.S. large-cap 500 index for one and a VettaFi U.S. innovation 100 index for the other, then systematically reinvest the dividends those companies pay into Bitcoin, rather than back into the shares.
The "DRIP" in the funds’ name riffs on the dividend reinvestment plans long used to compound stock holdings and here repurposed to accumulate Bitcoin. Each underlying index starts with a 5% Bitcoin weighting and 95% equities, per the filing, with Bitcoin exposure capped at 20% and trimmed back at quarterly rebalances.
The funds would gain that exposure through crypto exchange-traded products, including Bitcoin ETPs sponsored by Franklin Templeton affiliates, along with options and futures, and in some cases through a wholly-owned subsidiary in the Cayman Islands. VettaFi maintains the indices.
The filing is preliminary. It lists no fees yet, and under the rule Franklin used, the funds could take effect around 75 days later, putting a potential launch in early September..
