Asset management firm Franklin Templeton has filed with the U.S. Securities and Exchange Commission (SEC) to launch two exchange-traded funds (ETFs) that would reinvest stock dividends into Bitcoin.
According to filings submitted on Thursday, Franklin is seeking to register the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF. The funds have an early estimated effective date of September 1, 2026.
The funds are designed to track the VettaFi US Large-Cap 500 Bitcoin DRIP Index and an innovation-focused variation of the same index. Under the proposed mechanism, dividends generated by the stocks held in the funds would be systematically invested in Bitcoin instead of being reinvested in equities.
The name “DRIP” refers to dividend reinvestment plans, which have traditionally been used to expand equity positions. In this case, the same approach would be used to accumulate Bitcoin.
Exposure to Bitcoin would be obtained through Bitcoin exchange-traded products, futures, options and other instruments. In some cases, the funds could gain this exposure through a subsidiary established in the Cayman Islands. VettaFi will manage the underlying indexes.
The indexes will begin with a 95% allocation to large-cap US equities and a 5% allocation to Bitcoin. During quarterly rebalancing periods, any Bitcoin allocation exceeding 5% will be reduced to 4.5%. Between rebalancing dates, the total Bitcoin allocation will be capped at 20%.
As of April 30, the equity index included approximately 498 securities, with market capitalizations ranging from $7.5 billion to $4.9 trillion.
The filing remains preliminary. It does not provide details about the funds’ fees. Under the regulatory framework used for the filing, the ETFs could become effective in approximately 75 days, pointing to a potential launch in early September.
A New Entrant Joins the Crowded ETF Race
Following the SEC’s introduction of generic listing standards for crypto-linked funds in late 2025, issuers have accelerated efforts to bring new products to market. Bitwise estimates that more than 100 similar ETFs could launch during 2026.
Bloomberg Intelligence analyst James Seyffart said late last year that the number of pending applications had surpassed 100, highlighting the intense flow of new products from issuers.
Much of this activity has moved beyond simple spot Bitcoin exposure, a category dominated by BlackRock’s iShares Bitcoin Trust with tens of billions of dollars in assets. Issuers are increasingly competing through fund structures and income strategies.
These products include covered-call income funds such as BlackRock’s recently launched iShares Bitcoin Premium Income ETF, alongside other structured offerings. Franklin’s model of converting stock dividends into Bitcoin represents the latest example of this trend.
The ETF filings also expand Franklin Templeton’s aggressive push into digital assets. The company already operates its own spot Bitcoin ETF, EZBC, which held $358.9 million in net assets and had recorded $329.6 million in cumulative net inflows as of Thursday.
Franklin also acquired 250 Digital from CoinFund this year and established a dedicated Franklin Crypto division. The company formed a tokenization partnership with Kraken’s parent company, Payward, while its BENJI tokenized money market funds are now available across multiple blockchains.
In May, Franklin Templeton partnered with Payward to explore new ways of tokenizing traditional investment products. Earlier this month, the company integrated its BENJI tokenized money market fund and other tokenized products with MoonPay Trade.
The integration allows institutional users to move between stablecoins such as USDC and USDT and Franklin’s tokenized fund through MoonPay’s onchain trading infrastructure.
