10-Q: Franklin Crypto Index ETF Reports Strong Asset Growth

Franklin Crypto Index ETF (EZPZ) reported a significant increase in total assets to $17.02 million by September 30, 2026, driven by substantial unrealized gains in digital assets, though Net Asset Value per Share saw a slight decline.

Summary

• The Franklin Crypto Index ETF (EZPZ) reported total assets of $17,024,864 as of September 30, 2026, an increase from $10,215,391 as of December 31, 2025.
• Net Asset Value (NAV) per Share was $21.28 as of September 30, 2026, down from $22.70 as of December 31, 2025.
• For the nine months ended September 30, 2026, the fund experienced a net increase in net assets of $1,495,974, primarily due to a net change in unrealized appreciation on investments in Digital Assets of $1,648,404.
• The fund's investment objective is to closely track the performance of the CF Institutional Digital Asset Index - US Settlement Price.
• The Sponsor, Franklin Holdings, LLC, assumes ordinary operating expenses, with the fund bearing transaction costs for rebalancing and fee payments.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive filing, reflecting strong performance in digital asset appreciation despite a slight decrease in Net Asset Value per Share over the nine-month period. The fund's ability to track its index and the overall growth in assets under management are positive indicators.

Positives

• Total assets increased significantly from $10,215,391 to $17,024,864 between December 31, 2025, and September 30, 2026.
• The fund achieved a 45.06% total return at NAV for the three months ended September 30, 2026.
• Substantial unrealized appreciation on digital assets contributed $1,648,404 to net assets for the nine months ended September 30, 2026.
• The fund's NAV per Share increased by 45.06% in the three months ended September 30, 2026.
• The Sponsor covers ordinary operating expenses, limiting the fund's direct cost burden.

Negatives

• The Net Asset Value per Share decreased from $22.70 at December 31, 2025, to $21.28 at September 30, 2026.
• For the nine months ended September 30, 2026, the fund experienced a net investment loss of $17,192.
• The fund's NAV per Share decreased by 6.26% for the nine months ended September 30, 2026.
• The fund's performance may not be directly comparable to the Underlying Index due to differences in pricing sources and inclusion of Sponsor's fees in the fund's return.

Risks

• Concentration risk associated with holding only Digital Assets, making the fund vulnerable to price fluctuations.
• Extreme volatility in digital asset prices could lead to a substantial loss of value in the Shares.
• Market conditions, sentiment towards digital assets and blockchain technology, and trading activity on digital asset platforms can adversely affect value.
• Potential for manipulation on digital asset platforms.
• Changes in the adoption of digital assets as a medium of exchange or store of value.
• Risks associated with forks in the digital asset network.

Future Outlook

The filing does not provide specific forward-looking guidance on future performance. However, it notes that the Sponsor is evaluating the impact of new IRS guidance on staking digital assets. The fund's performance is inherently tied to the performance of the CF Institutional Digital Asset Index.

Management Comments

• All statements (other than statements of historical fact) included in this report that address activities, events or developments that may occur in the future, including such matters as changes in commodity prices and market conditions for Digital Assets, and the Shares, the Funds operations, the Sponsors plans and references to the Funds future success and other similar matters are forward-looking statements. These statements are only predictions. Actual events or results may differ materially.
• The Sponsor has determined that the Trust and the Fund fall within the scope of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 946, Financial Services-Investment Companies, and has concluded that solely for accounting purposes, the Trust is classified as an Investment Company as defined in ASC 946.
• In the opinion of management of the Sponsor of the Trust, all adjustments (which include only normal recurring adjustments) necessary to state fairly the financial position and results of operations for all periods stated have been made.

Industry Context

StockSavvy.ai notes that the Franklin Crypto Index ETF operates within the rapidly evolving digital asset investment space. The recent IRS guidance on staking for grantor trusts is a significant development that could impact how such ETFs manage their portfolios and tax status.

Comparison to Industry Standards

• The fund aims to track the CF Institutional Digital Asset Index, which includes major cryptocurrencies like Bitcoin and Ether.
• The expense ratio is 0.19% of the net asset value, which is competitive for passively managed digital asset funds.
• The fund's NAV per Share performance is compared against the Underlying Index, with variances attributed to pricing sources and fees.

Legal Proceedings

• As of November 13, 2026, the Trust and the Fund are not subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings threatened against the Trust or Fund.

Related Party Transactions

• The Sponsor, Franklin Holdings, LLC, receives a unitary fee for services performed.
• Franklin Distributors, LLC, an affiliate of the Sponsor, serves as the Marketing Agent.
• Franklin Templeton, Inc. is the ultimate parent company of the Sponsor and Marketing Agent.

Stakeholder Impact

• Shareholders are exposed to the volatility of digital asset prices, which can lead to significant gains or losses.
• The fund's NAV per Share is affected by the performance of the underlying digital assets and the Sponsor's fee.
• The Sponsor, as a related party, receives fees for its services.
• Authorized Participants are involved in the creation and redemption of Creation Units.

Next Steps

• The Sponsor is evaluating the impact of the IRS's Rev. Proc. 2026-20 on the Trust and the Fund.
• The fund will continue to seek investment results that closely correspond to the performance of the CF Institutional Digital Asset Index.
• The fund will sell Digital Assets as needed to pay the Sponsor's fee and to rebalance its portfolio.

Key Dates

Recommendation

The fund shows strong asset growth driven by digital asset appreciation and a competitive expense ratio. However, the slight decrease in NAV per Share and the inherent volatility of the underlying assets suggest a 'hold' recommendation. Investors should be aware of the concentration risk and the potential for significant price swings.

Keywords

Franklin Crypto Index ETF, Digital Assets, Bitcoin, Ether, ETF, Cryptocurrency, Index Fund, CF Institutional Digital Asset Index