Franklin Templeton has registered two exchange-traded funds for a Nasdaq listing that aim to turn US stock dividends into Bitcoin exposure. An October 22 securities filing identifies the proposed tickers FBEQ and FIBT, although the company has not announced a trading launch date, and the filing itself does not constitute approval.

The $1.8 trillion asset manager plans to offer the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF. The DRIP designation in both names refers to the dividend reinvestment process at the core of the products' strategy. In conventional DRIPs, payouts are automatically used to buy more shares of the company that issued them; these funds instead channel that income toward Bitcoin. Both vehicles will invest mainly in US stocks and use dividend income to increase Bitcoin-related holdings over time.

🚨 Franklin Templeton propone dos ETF que destinarían dividendos a Bitcoin FBEQ y FIBT partirían de 95% en acciones de EE. UU. y 5% en instrumentos vinculados a BTC. La exposición tendría un límite de 20%. Comisión anunciada: 0,09%. Los documentos no confirman aprobación ni… pic.twitter.com/kkNmrykbyw — Diario฿itcoin (@DiarioBitcoin) October 23, 2026

(Source: DiarioBitcoin on X)

According to the SEC registration, the fund concept was first announced by Franklin Templeton in June. The firm subsequently filed an amendment to its registration papers before registering the latest securities under Section 12(b) of the Securities Exchange Act. Filing the security registration places the funds closer to trading, although it does not necessarily mean that shares have begun trading. Under the standard process, the registration still must become effective and the Nasdaq listing finalized before any shares can change hands.

How Will Franklin Templeton's Bitcoin ETFs Work?

The two funds will track different indices provided by VettaFi, and both begin with initial holdings of 95% US equities and 5% Bitcoin-based securities.

The Franklin US Equity Bitcoin DRIP Index ETF will track the VettaFi US Large-Cap 500 Bitcoin DRIP Index. The stock holdings in this fund's portfolio are based on an index compiled from the 500 largest US firms.

The Franklin US Innovation Bitcoin DRIP Index ETF, meanwhile, will track the VettaFi US Innovation 100 Bitcoin DRIP Index. That index is built from the 100 largest companies selected from the universe of innovative Nasdaq stocks.

While the funds' stock picks differ, their dividend strategy is identical. Rather than using dividends to purchase additional stock, Franklin Templeton will allocate regular and special dividends to increase exposure to Bitcoin. According to the indexing strategy, dividend reinvestment takes place on the day after the ex-dividend date of each respective company, with the allocation invested in Bitcoin-based exchange-traded products and other investment securities. In practical terms, any growth in Bitcoin exposure beyond the initial 5% would be funded by the dividends the equity holdings generate.

Investors will not receive Bitcoin directly and will hold ETF shares instead. Their investment returns will be affected by changes in both stock prices and the prices of Bitcoin-based securities. The proposed annual management fee for the two funds is 0.09%, a level in line with low-cost index ETFs.

Why Is Bitcoin Exposure Capped at 20%?

Franklin Templeton established allocation limits to prevent Bitcoin exposure from becoming the largest part of the portfolio. The funds will begin with a 5% allocation, and subsequent reviews will determine whether it is increased further.

During quarterly rebalancing, if Bitcoin exposure exceeds 5%, it will be limited to 4.5%, while other parts of the portfolio are reallocated to equities according to index rules. A separate limit operates between scheduled reviews: if Bitcoin exposure rises above 20%, the index will reduce it to 4.5% on the second business day after the threshold has been reached. Because these limits are written into the index rules, the Bitcoin allocation is managed mechanically rather than left to a portfolio manager's discretion.

Both indices will rely on the Kaiko Bitcoin New York Reference Rate at 4 p.m. Eastern Time for valuation purposes. Franklin Templeton also identified cryptocurrency volatility, custody risks, transaction fees, and changes in regulation among the investment risks.

How Is Franklin Templeton Expanding Digital Asset Products?

The registration is one of several recent moves by the firm within its cryptocurrency portfolio. Its existing Franklin Bitcoin ETF, listed under the ticker EZBC, already provides exposure to Bitcoin. EZBC began trading in January 2024, when the SEC approved the first US spot Bitcoin ETFs. According to data provided on October 22, EZBC had recorded approximately $335 million in net inflows, in addition to the $7.3 million it attracted during Wednesday's trading session.

In August, Franklin Templeton obtained SEC staff no-action relief regarding investments in its OnChain U.S. Government Money Fund, known as BENJI. The relief concerns the custody requirements for fund shares maintained through blockchain technology.

In September, the firm partnered with Bybit on a program through which eligible institutional investors could participate in off-exchange trading of tokenized fund shares in order to obtain credit lines denominated in USDT and USDC.

These initiatives represent different types of exposure within the firm's digital asset lineup. BENJI offers tokenized money market exposure, while the new DRIP ETFs combine traditional equity investing with a Bitcoin allocation, extending Franklin Templeton's approach of offering equity-based products with additional cryptocurrency exposure.