Instead of distributing stock dividends to shareholders or reinvesting them into additional equities, the funds would direct the income toward Bitcoin exposure.
DRIP refers to a dividend reinvestment plan, which traditionally uses dividend payments to purchase more shares. Franklin Templeton’s proposed structure would instead use those payments to accumulate Bitcoin.
The US Equity fund would track the VettaFi US Large Cap 500 Bitcoin DRIP Index, providing broad exposure to about 500 large US companies.
The Innovation fund would track a separate VettaFi index focused on large cap companies tied to growth and innovation themes.
Bitcoin exposure could come through spot Bitcoin exchange traded products, futures, options, and investments made through a wholly owned Cayman Islands subsidiary.
The funds would rebalance quarterly. When Bitcoin exceeds its target allocation, the position would be reduced to about 4.5%, allowing future dividends to rebuild the allocation.
Bitcoin exposure would be capped at 20% between rebalancing dates, preventing a sharp rise in BTC from overtaking the equity portion of the portfolio.
The structure allows the funds to maintain their primary exposure to US stocks while creating a recurring source of Bitcoin purchases funded by corporate dividends.
Franklin Templeton has not disclosed management fees for either product. The filings remain subject to regulatory review and do not guarantee that the funds will launch on the proposed date.
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