Expands Franklin Templeton's digital asset portfolio with the introduction of Singapore's tokenized money market fund
Franklin Templeton, a global investment management firm, has entered the tokenized money market with the launch of its new fund in Singapore. The Franklin OnChain U.S. Dollar Short-Term Money Market Fund aims to offer greater transparency, security, accessibility, and efficiency to retail investors in the city-state.
Differences with FOBXX Fund
The risks and returns of the Singapore-based Franklin OnChain U.S. Dollar Short-Term Money Market Fund and the US-based FOBXX fund differ due to their investment focus.
The FOBXX fund, managed by Franklin Templeton, is a U.S.-registered money market fund that primarily invests in U.S. Treasury securities, focusing on short-term government debt. It maintains high liquidity and capital preservation.
In contrast, the Singapore fund targets retail investors and is similarly short-term and USD-based. However, specific details on its portfolio composition compared to FOBXX are less explicitly documented. The Singapore fund is positioned for retail access and may have regulatory approvals tailored for the Singapore market.
Risk Profile and Returns
Both funds carry the low-risk profile typical of money market funds investing in government debt, with minimal credit risk and high liquidity. The FOBXX's investments in U.S. Treasuries are considered very low risk due to government backing.
The Singapore tokenized fund would carry similar risk characteristics, though influenced by local regulations and possibly different operational structures tailored for retail investors in Singapore. Returns for both funds are expected to be modest, reflecting short-term interest rates on U.S. government securities.
Transparency Practices
The FOBXX fund leverages public blockchain technology (Avalanche, VeChain, etc.) for on-chain share ownership recording, transaction processing, and enhanced investor utility, including peer-to-peer transfer and potential secondary market trading.
The Singapore tokenized fund also uses blockchain for transparency and accessibility to retail investors. Transparency and regulatory compliance are highlighted, but specific blockchain network details or on-chain capabilities are less detailed.
Accessibility and Issuance
The Singapore fund offers investment opportunities starting at just $20, making it accessible to a wider range of investors. In the US, the Franklin OnChain U.S. Dollar Short-Term Money Market Fund provides complete portfolio disclosure with downloadable lists of all assets, whereas the Luxembourg-based fund only discloses its top ten holdings.
The Singapore fund, unlike its US counterpart, has not been specified to have reached a certain issuance amount. In the US, the FOBXX fund has reached an issuance of over $750 million, making it the second largest tokenized fund.
Regulatory Approval and Comparison with BUIDL
The Monetary Authority of Singapore has given authorization to the Singapore Franklin Templeton subsidiary to launch the Franklin OnChain U.S. Dollar Short-Term Money Market Fund.
The new Luxembourg fund by Franklin Templeton caters to both institutional and retail investors, similar to the Singapore fund. However, it does not have a specified market capitalization, unlike BlackRock's BUIDL, the largest tokenized fund, which has almost $2.9 billion in market capitalization.
In conclusion, the FOBXX fund is positioned primarily as a U.S.-registered institutional-grade money market fund with blockchain innovation, while the Singapore tokenized fund adapts similar principles for the retail market under Singapore’s regulatory framework, sharing comparable portfolio and risk profiles but differing slightly in investor access and specific blockchain application scope.
- The Franklin OnChain U.S. Dollar Short-Term Money Market Fund in Singapore, built for retail investors, utilizes blockchain technology for improved transparency and accessibility, similar to the FOBXX fund, but with less explicit detail on its portfolio composition compared to its US counterpart.
- The Singapore tokenized fund, like the FOBXX fund, carries a low-risk profile typical of money market funds, offering modest returns and maintaining high liquidity, although it may be influenced by local regulations and operational structures tailored for retail investors in Singapore.
- Investment opportunities in the Singapore fund begin at just $20, making it accessible to a broader range of investors, whereas the US FOBXX fund provides complete portfolio disclosure but requires a higher minimum investment.
- The Monetary Authority of Singapore has granted authorization for the launch of the Singapore Franklin Templeton subsidiary's fund, distinguished from the Luxembourg-based FOBXX fund, which does not have a specified market capitalization, unlike BlackRock's BUIDL, the largest tokenized fund.
- In the realm of stablecoins and investing, the FOBXX fund, primarily focusing on U.S. Treasury securities, represents an institutional-grade money market fund with blockchain innovation, while the Singapore fund caters to retail investors under Singapore's regulatory framework, offering a comparable portfolio and risk profile but with varied investor access and blockchain application differences.
