Franklin Templeton, one of the world’s largest asset managers, wants to create a new investment product that combines traditional stock investing with bitcoin.

The company has filed paperwork with the US Securities and Exchange Commission (SEC) to launch two exchange-traded funds (ETFs). These funds would automatically use stock dividends to buy bitcoin exposure.

The two proposed funds are called the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF.

Both funds would mostly invest in large US companies. But unlike normal stock funds, they would not use dividends to buy more shares or pay cash to investors. Instead, dividends collected from the stocks would be used to increase the fund’s bitcoin exposure.

The funds are designed to start with 95% invested in US stocks and 5% invested in bitcoin-related assets.

The idea comes from something called a Dividend Reinvestment Plan (DRIP). Normally, a DRIP automatically uses stock dividends to buy more stock over time. Franklin Templeton is changing that idea. Instead of buying more shares, the dividends would be used to buy bitcoin exposure.

The setup essentially provides an automatic and easy-to-manage stream that directs 5% of equity dividends into bitcoin or bitcoin-related products.

The bitcoin portion would not always be direct bitcoin ownership. The funds could gain exposure through Bitcoin ETFs, futures contracts, options, and other investment tools.

Franklin Templeton also added limits.

To keep bitcoin as a secondary allocation, the index is reviewed quarterly. If bitcoin's weight has risen above 5%, it is reduced to 4.5% at the time of review. The index also imposes a hard cap of 20%: if bitcoin exceeds that level between scheduled rebalances, its weight is cut back to 4.5% within two business days.

Any bitcoin exposure removed during these rebalances is redistributed across the fund's stock holdings.

The first ETF would track a broad group of large US companies. The second would focus more on innovation and growth businesses.

If regulators approve the products, they could begin trading as early as September 2026.
The proposal comes at a time when investment companies are creating new kinds of Bitcoin ETFs.

When spot Bitcoin ETFs launched in 2024, most simply gave investors access to bitcoin prices. Now companies are trying different approaches to stand out.

Franklin Templeton’s idea is different because it mixes stock investing with automatic bitcoin accumulation. These are investment funds focused on equities that include exposure to bitcoin, rather than funds that invest directly in bitcoin.

Supporters believe this may appeal to people who want some bitcoin exposure but do not want to buy and manage the asset directly. This would give them a passive exposure to bitcoin that requires no technical knowledge or management.

Investors would still own a mostly stock-based portfolio while gradually building a bitcoin position in the background. Some analysts also think this design could create more regular demand for bitcoin because stock dividends arrive on an ongoing basis.

Still, experts say expectations should remain realistic.

The ETFs are not approved yet, and details such as fees and trading symbols have not been announced. Even if the funds launch, nobody knows how many investors will actually want this type of product.