Franklin Templeton, a global asset manager with over $1.3 trillion in assets under management, is set to launch two digital assets separately managed account (SMA) strategies through Eaglebrook Advisors in the fourth quarter. The Franklin Templeton Digital Assets Core strategy will invest in 10-15 of the largest digital assets, while the Franklin Templeton Digital Assets Core Capped strategy has similar holdings, but with Bitcoin and Ether, each capped at 25% of the portfolio. According to Eaglebrook Advisors, these SMAs offer direct ownership, low minimums, minimal tracking error, and portfolio reporting integration.
Franklin Templeton has been experimenting with Blockchain technology for some time now and has recently announced plans to offer digital asset strategies to wealth managers. In a recent report, the company outlined five “megatrends” that are transforming modern society and driving the development of the critical crypto ecosystem.
One of these megatrends is decentralization, which is expected to drive the fourth wave of technology-backed innovations. The report highlights the shift from proprietary networks to open networks that allow for broader participation, which has put disproportionate power in the hands of Web2 companies. The report also notes that companies have shifted their focus from tangible assets to intangible assets and have adopted new technologies to remain competitive.
On the consumer side, individuals now have more power through the use of digital asset platforms that have made asset classes and complex financial products more broadly available, particularly through tokenized assets and decentralized finance (DeFi).
Sandy Kaul, head of Franklin Templeton’s digital asset and industry advisory services, believes that tying the potential of these new models to the history of innovation over the last 60 years can help traditional financial professionals understand the potential of these new models.
The Franklin Templeton Digital Assets Core strategy is market-cap weighted and invests in 10-15 of the largest digital assets, with bitcoin and ether representing the majority of the portfolio. The Franklin Templeton Digital Assets Core Capped strategy has similar holdings but caps bitcoin and ether at 25% of the portfolio. Both strategies offer direct ownership, low minimums, minimal tracking error, and portfolio reporting integration.
In conclusion, Franklin Templeton’s foray into the digital asset space with Blockchain technology at its core is a significant move for the financial giant. The company’s strategies offer wealth managers an opportunity to invest in digital assets through separately managed accounts with direct ownership and minimal tracking error. With the rise of decentralized solutions and the potential for innovation through tokenized assets and DeFi, Franklin Templeton is well-positioned to capitalize on the next wave of technology-backed innovations.