Franklin Templeton Files for Two PayDay ETFs Targeting Biweekly Income

Franklin Templeton has filed to launch two actively managed ETFs under its PayDay branding, combining U.S. equity exposure with options strategies designed to generate additional income and deliver distributions every two weeks. The proposed Franklin PayDay Core Enhanced Equity Income ETF will primarily invest in U.S. large-cap stocks, focusing on S&P 500 constituents and blending growth and value styles. The Franklin PayDay Innovation Enhanced Equity Income ETF will focus on companies in the Nasdaq Composite, particularly Nasdaq-100 constituents. Both funds will invest at least 80% of net assets in equities and use a quantitative stock-selection process incorporating quality, value, sentiment, and momentum-related factors alongside conviction signals drawn from portfolios managed by Franklin Templeton, Putnam Investments, and ClearBridge Investments. Portfolios will generally be rebalanced monthly.

O'Shaughnessy Asset Management (OSAM) will manage the options overlays, selling call options on major U.S. equity indices, primarily the S&P 500 for the Core fund and Nasdaq-100 for the Innovation fund. Options exposure may reach 100% of the value of equity holdings, with contracts generally expiring within five weeks. The strategy seeks to generate premiums to support relatively stable biweekly distributions, although selling calls may limit upside participation during strong equity rallies. Both funds may invest up to 10% of assets in foreign securities and will be classified as non-diversified.