Franklin Templeton Launches Bitcoin ETFs With 5% Starting Allocation and Dividend-Reinvestment Strategy

Franklin Templeton has launched two exchange-traded funds that pair a small Bitcoin allocation with portfolios of U.S. stocks, using equity dividends to build the funds' cryptocurrency exposure. The asset manager introduced the two funds on October 29, 2026, with starting allocations of 95% equities and 5% Bitcoin, managed through a rules-based dividend reinvestment strategy. The products add to a digital-asset lineup that already includes the firm's operating spot Bitcoin ETF, EZBC.

Two Funds, Two Equity Portfolios

The funds share a dividend reinvestment approach but track different equity baskets. Both rely on VettaFi indexes designed to keep Bitcoin in a secondary allocation.

The Franklin U.S. Equity Bitcoin DRIP Index ETF (FBEQ) tracks the VettaFi U.S. Large-Cap 500 Bitcoin DRIP Index. Its equity portion provides access to roughly 500 of the largest U.S. companies, ranked by market capitalization.

The Franklin U.S. Innovation Bitcoin DRIP Index ETF (FIBT) follows the VettaFi U.S. Innovation 100 Bitcoin DRIP Index, pairing Bitcoin with access to 100 of the largest non-financial U.S. issuers listed on Nasdaq.

How the Dividend Reinvestment Works

"DRIP" stands for dividend reinvestment. Rather than using stock payouts to purchase additional shares — the way such plans traditionally work — the strategy routes them into Bitcoin exposure. The funds do not hold Bitcoin directly; instead, they obtain exposure through exchange-traded products, including Franklin's already-operating spot Bitcoin ETF, EZBC.

The initial 5% Bitcoin weight is not a fixed ceiling. Dividend inflows and price gains can lift it between rebalances. The indexes review the exposure quarterly, trimming the Bitcoin position back to 4.5%, subject to a 20% hard cap on its weight. The 4.5% reset point sits just below the 5% starting weight, leaving room for the allocation to drift between reviews, while the cap prevents Bitcoin from exceeding one-fifth of either fund.

Nasdaq Listing, Fees and Portfolio Managers

Both funds will list on Nasdaq — the same exchange where FIBT's underlying companies are listed. FBEQ charges 9 basis points (0.09%), while FIBT charges 19 basis points (0.19%).

Ahead of the launch, Franklin Templeton submitted a Form 8-A to the U.S. Securities and Exchange Commission (SEC) on October 22, 2026, the registration filing used to list securities on a national exchange. Dina Ting, Hailey Harris, Joe Diederich and Basit Amin, who together oversee index-based strategies at the firm, will manage the funds.

Franklin Templeton's Case for Combining the Exposures

Franklin Templeton positions its Bitcoin ETFs as a way to incorporate digital assets into broader portfolios, rather than simply provide standalone access. Its executives link the approach to Bitcoin's development as an investable asset and to changes in ETF design.

"Bitcoin has matured as an investable asset, supported by deeper market infrastructure, broader adoption and a growing understanding of the role it can play in portfolios," said Dina Ting, SVP and Head of Index Investments at Franklin Templeton.

Ting said investors would increasingly consider how to incorporate Bitcoin within a broader investment strategy, describing systematic exposure-building as one approach.

According to Jeff Masom, Head of U.S. Distribution and Global Wealth Management Private Markets at Franklin Templeton, ETF innovation has progressively shifted from providing access to single asset classes toward blending exposures within portfolios. "These ETFs bring together U.S. equities and Bitcoin through a differentiated index methodology," he said.