Franklin Templeton Introduces Digital Asset SMA Models on Eaglebrook Advisors’ Platform

Strategies Focus on Largest Digital Assets by Market Cap in Model-Delivery Format

Franklin Templeton today announced the introduction of two new digital asset separately managed account (SMA) strategies through Eaglebrook Advisors’ (Eaglebrook) platform, a leading digital asset SMA platform operated by an SEC-registered adviser. Available to investment professionals working with US investors in mid-October, these two SMA strategies provide access to digital assets through Eaglebrook’s turnkey platform that is exclusively focused on meeting the evolving needs of financial advisors, wealth managers and their clients in this sector.

“Partnering with Eaglebrook is an important step forward for Franklin Templeton, as we continue to expand our suite of digital assets strategies and provide financial and wealth management advisors with the tools to meet clients’ needs in a rapidly shifting investment landscape,” said Roger Bayston, head of Digital Assets, Franklin Templeton.

Franklin Templeton Digital Assets Core is a market cap-weighted strategy that invests in 10 to 15 of the largest digital assets, excluding stablecoins and meme coins. Franklin Templeton Digital Assets Core Capped takes a similar approach, but with holdings of Bitcoin and Ethereum (two of the largest non-stablecoin digital assets) each capped at 25% of the portfolio. Models for both strategies are provided to Eaglebrook on a non-discretionary basis and are ordinarily rebalanced monthly.

Models for the digital asset SMAs are managed by Tony Pecore, SVP, director of Digital Asset Management, Franklin Templeton. “This launch represents an important milestone for the firm. These new digital asset SMA strategies give advisors and their clients the opportunity to gain exposure to the digital asset ecosystem, while supporting advisors through professional management and oversight,” said Pecore, who has nearly two decades of experience in traditional fixed income portfolio management and research—including multi-sector fixed income, global absolute return, and machine learning driven alternative credit strategies—in his prior roles with the firm. Pecore currently leads a diverse team of research analysts focused on developing investment strategies in the digital assets space.

Sam Marciano, head of SMA Distribution, Franklin Templeton, said, “Expanding Franklin Templeton’s diverse SMA capabilities to include digital asset SMAs affirms our commitment to offering industry relevant investment solutions that meet the evolving needs of our clients.”

"We are thrilled to announce our partnership with Franklin Templeton. Financial advisors can finally access professionally managed multi-coin SMA strategies with one of the world's leading asset managers. We are excited to make these new strategies available for use by advisors and look forward to building a valuable, enduring relationship between our two firms,” said Christopher King, CEO and Founder of Eaglebrook Advisors.

The launch of these model SMAs follows Franklin Templeton's strategic investment in Eaglebrook Advisors announced in April 2022.

About Franklin Templeton

Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 155 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers boutique specialization on a global scale, bringing extensive capabilities in equity, fixed income, multi-asset solutions and alternatives. With offices in more than 30 countries and approximately 1,300 investment professionals, the California-based company has 75 years of investment experience and approximately $1.4 trillion in assets under management as of July 31, 2022. For more information, please visit franklintempleton.com and follow us on LinkedIn, Twitter and Facebook.

About Eaglebrook

Founded in 2019, Eaglebrook Advisors is a technology-centric digital asset investment platform that offers Separately Managed Accounts (SMAs) to wealth management firms and financial advisors. Eaglebrook’s digital asset SMA platform allows advisors to securely access direct digital asset investments for their clients and is integrated with the advisors’ existing portfolio management system and workflow. This solution allows for seamless client onboarding, investment, reporting, and holistic portfolio management of a client’s bitcoin and digital asset investments within a secure, compliant, unified ecosystem. Eaglebrook’s investment platform offers its own advisor-driven custom digital asset SMAs, access to actively managed third-party investment manager digital asset SMAs, and educational resources for advisors and clients. The company is backed by leading wealth management executives and financial institutions including Castle Island Ventures, Brewer Lane Ventures, and Franklin Templeton. For more information about Eaglebrook, its products, services, and for important disclosures, please visit www.eaglebrookadvisors.com.

All investments involve risk, including the loss of principal. Certain Accounts will invest in cryptocurrencies, such as, but not limited to, Bitcoin or Ethereum, as well as other digital representations of value or rights (including for investment, finance or idle cash purposes). Such assets or investments may be transferred and stored electronically, using distributed ledger technology or other technology, and may include but are not limited to any decentralized application tokens and blockchain-based tokens and other digital assets, or instruments for the purchase of such, including but not limited to token rights agreements, token warrants and other instruments (together with cryptocurrencies, “Digital Assets”). Investments in Digital Assets are subject to many specialized risks and considerations, including but not limited to risks relating to (i) immature and rapidly developing technology underlying Digital Assets, (ii) security vulnerabilities of this technology, (iii) credit risk of Digital Asset exchanges that may hold an Account’s Digital Assets in custody, (iv) regulatory uncertainty around the rules governing Digital Assets, Digital Asset exchanges and other aspects and parties involved with Digital Asset transactions, (v) high volatility in the value/price of Digital Assets, (vi) unclear acceptance of some or all Digital Assets by users and global marketplaces, and (vii) manipulation or fraud resulting from the pseudo-anonymous manner in which ownership of Digital Assets is recorded and managed.

Additional risks applicable to Digital Assets Strategies include:

Cybersecurity risk: Portfolio manager(s), service providers to the portfolios and other market participants increasingly depend on complex information technology and communications systems to conduct business functions. These systems are subject to a number of different threats or risks that could adversely affect the portfolio and their investors, despite the efforts of the portfolio manager(s) and service providers to adopt technologies, processes and practices intended to mitigate these risks and protect the security of their computer systems, software, networks and other technology assets, as well as the confidentiality, integrity and availability of information belonging to the portfolios and their investors.

Liquidity risk: Liquidity risk exists when the markets for particular securities or types of securities are or become relatively illiquid so that it is or becomes more difficult to sell the security, partially or in full, at the price at which the security was valued. Illiquidity may result from political, economic or issuer-specific events; changes in a specific market’s size or structure, including the number of participants; or overall market disruptions. Securities with reduced liquidity or that become illiquid involve greater risk than securities with more liquid markets.

Market risk: The market value of securities or other investments will go up and down, sometimes rapidly or unpredictably. Investments may decline in value due to factors that affect an individual issuer (such as the result of supply and demand) or a particular industry or sector. A security’s or other investment’s market value may also go up and down due to general market activity or other results of supply and demand unrelated to the issuer, such as real or perceived adverse economic conditions, changes in interest rates or exchange rates, or adverse investor sentiment generally.

New strategy risk: The Franklin Templeton Digital Assets Core strategy has no operating history and is being first offered to client accounts during the third quarter of 2022.

Volatility risk: Trading prices for Digital Assets have historically been highly volatile. The value of the Digital Assets held by an account could decline rapidly, including to zero. Digital Assets have not been in existence long enough to assess the volatility of market cycles with any precision and an investment in an account may turn out to be substantially worthless. Investors should be prepared for volatile market swings and prolonged bear markets.

Unlisted securities risk: Unlisted securities (i.e., securities not listed on a stock exchange or other markets and for which no liquid secondary trading market exists) may involve a high degree of business and financial risk and may result in substantial losses. The companies underlying such securities may have relatively limited operating and profit histories. Many of these companies may also need substantial additional capital to support expansion or to achieve or maintain a competitive position and there is no assurance that capital will be available to finance such needs. In the absence of a liquid trading market for unlisted securities, they will be difficult to value. It is also possible that such investments will be difficult to liquidate when desired, which may limit the ability to realize their full value. Although it is generally desirable that unlisted securities become listed in due course, there can be no assurance that this will be the case, or that sufficient liquidity for substantial shareholdings will be available following listing.

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