In recent years, experts have recommended that investors allocate 1%-5% of their portfolios to bitcoin , hailing the cryptocurrency as a diversifier.
Now Franklin Templeton, which manages billions of dollars for clients, is looking to offer two alternative investment vehicles that do just that. The key feature is that the proposed exchange-traded funds use corporate dividends to buy exposure to bitcoin, creating an indirect, steady source of demand for the largest cryptocurrency.
In a Thursday filing with the Securities and Exchange Commission, the company registered the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF.
Both are designed to maintain an allocation of 95% in U.S. equities and 5% in bitcoin. They will hold large-cap U.S. stocks, with the first offering broad market exposure and the second focused on growth and innovation companies. Any dividends collected will be reinvested in bitcoin ETFs, futures or other instruments.
The structure effectively creates an automatic, low-maintenance 5% bitcoin feed funded entirely by equity dividends.