Franklin Templeton to launch 24/7 trading for equity, gold ETFs

Franklin Templeton, the global investment firm founded in 1947, is going to debut exchange-traded funds (ETFs) that trade around the clock via tokenized offerings, Bloomberg reported on March 25.

The 79-year-old Wall Street giant is partnering with a popular tokenization venture, Ondo Finance, to launch tokenized versions of its ETFs which will trade 24/7 on through crypto wallets instead of the traditional broker accounts during limited trading hours.

Franklin Templeton had more than $1.7 trillion in assets under management as of Jan. 31.

An ETF is an investment fund that tracks the price of the underlying asset and trades on traditional stock trading exchanges.

Related: What is tokenization? Explained

Ondo Finance has approximately $2.7 billion in tokenized assets outstanding.

In simple words, tokenization is the process of using blockchain technology to convert real-world assets (RWAs) such as stocks, investment funds, U.S. Treasuries, real estate, etc. into tradable tokens that represent ownership.

Tokenization not only digitizes assets but also makes them fractional and accessible assets available for 24/7 trading.

The tokenization initiative focuses on five funds:

• Franklin Focused Growth ETF (FFOG) — a growth-oriented U.S. equity fund

• Franklin U.S. Large Cap Multifactor Index ETF (FLQL) — a systematic large-cap equity fund

• Franklin Responsibly Sourced Gold ETF (FGDL) — a gold fund

• Franklin High Yield Corporate ETF (FLHY) — a high-yield corporate bond fund

• Franklin Income Equity Focus ETF (INCE) — an income-focused US equity strategy

As part of the plan, Ondo Finance will buy shares of these ETFs and issue tokens to investors. The goal is to reach out to new-age investors who only trade through crypto wallets and don’t use traditional brokers.

Such investors demand freedom to buy and sell funds outside the limited trade hours and tokenization allows trades to happen even when the traditional avenues sleep outside the limited trading hours and over the weekends.

Franklin’s innovation head Sandy Kaul said, “These ETFs represent a good mix of different exposures. And it gives a good test case for us to see what is really striking the appetite to this a new audience.”

For now, the tokenized ETFs will only be available in Europe, Asia-Pacific, the Middle East and Latin America. Their availability in the United States will depend on regulatory clarity regarding the on-chain distribution of registered funds, Franklin said.