Franklin Templeton has submitted a filing to the U.S. Securities and Exchange Commission for two exchange-traded funds designed to automatically reinvest stock dividends into Bitcoin exposure. The proposed funds are named the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF. According to the filing, the two ETFs are expected to become effective as early as September 1, 2026.
Two proposed ETFs built around dividend reinvestment
The central feature of the proposed structure is the automatic reinvestment of dividends generated by stock holdings into Bitcoin-related exposure. The Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF would both be index-tracking products. One would track the VettaFi US Large-Cap 500 Bitcoin DRIP Index, while the other would track a related innovation index. The initial allocation for both ETFs is listed as 95% U.S. large-cap equities and 5% Bitcoin.
The structure described in the filing does not place the entire portfolio into Bitcoin. Instead, it combines a dominant U.S. large-cap equity allocation with a defined Bitcoin allocation. The 95% and 5% starting weights separate the stock component from the Bitcoin component, while the DRIP design refers to the mechanism under which stock dividends are automatically directed into Bitcoin-related exposure.
Quarterly rebalancing sets defined Bitcoin limits
The two proposed ETFs also include quarterly rebalancing rules. At each quarterly rebalance, if the Bitcoin allocation exceeds 5%, the portfolio will adjust that exposure to 4.5%. The filing also states that Bitcoin may not exceed 20% of the portfolio. These terms set out a defined framework for the starting allocation, the rebalance threshold and the maximum Bitcoin weighting.
The filing lists several instruments that may be used to obtain Bitcoin exposure, including spot Bitcoin ETPs, futures and options. As described, the funds would not rely on a single instrument alone for Bitcoin exposure; they may use the types of instruments specified in the application. The filing therefore outlines two ETF products centered on U.S. equity exposure, with dividends automatically reinvested into Bitcoin-related holdings under the stated index and rebalancing rules.