Franklin Templeton filed two new index ETFs with the SEC on June 19, 2026, structured to automatically convert dividend payments from U.S. equities into Bitcoin exposure rather than distributing cash to shareholders.

The products, registered under the Franklin Templeton ETF Trust via a Form 485APOS filing, would be the first traditional equity funds designed to create rules-based Bitcoin demand from dividend flows. Most equity ETFs return dividends as cash or reinvest them in additional fund shares; these ETFs take a third path, routing dividend proceeds into Bitcoin-linked assets on a defined schedule.

How the dividend-to-Bitcoin conversion works

Both funds, the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF, carry 95% U.S. large-cap equities and a 5% Bitcoin exposure allocation. Dividends paid by those equity holdings flow into spot Bitcoin exchange-traded products, futures contracts, options, or a Cayman Islands subsidiary, all permitted under SEC rules for digital-asset exposure. Quarterly rebalancing restores the Bitcoin allocation to approximately 5% of assets; between rebalancing dates, Bitcoin exposure is capped at 20%.

What the funds track

The broad-market version tracks the VettaFi US Large-Cap 500 Bitcoin DRIP Index, which held 498 securities with market capitalizations ranging from $7.5 billion to $4.9 trillion as of April 30, 2026. The index uses float-adjusted weighting with concentration limits on individual positions. The second fund follows the VettaFi US Innovation 100 Bitcoin DRIP Index, limited to the 100 largest non-financial companies listed on Nasdaq, screened for liquidity, trading volume, and public float.

Not a Bitcoin ETF

Neither fund is a spot Bitcoin ETF or a Bitcoin futures product. The equity sleeve remains the primary allocation: the 5% Bitcoin position is the vehicle for dividend conversion, not the dominant exposure. Investors who want equity-fund exposure and prefer Bitcoin over cash payouts gain a passive, automatic vehicle with no manual conversion required. Tickers, management fees, and the listing exchange are not disclosed in the preliminary filing.

Timeline and SEC review

Both ETFs designate September 1, 2026 as the requested effective date. As a Form 485APOS filing under Rule 485(a), the registration requires SEC review and a formal declaration of effectiveness before it takes effect; September 1 is a target, not a guaranteed launch date.