Franklin Templeton and SBI Holdings, a Japanese internet-based financial conglomerate, have signed a memorandum of understanding to form a joint venture in Japan.

The proposed joint venture will harness best-in-class capabilities of both firms by combining Franklin Templeton’s comprehensive suite of investment products including exchange-traded funds (ETFs), and its experience in digital assets, with SBI’s strength in distribution, integrated financial services capabilities and reach in the Japanese market.

With increased volatility across global markets, emerging asset classes including digital assets and cryptocurrencies, which have low correlation with traditional assets such as equities and fixed income, can help to diversify risk in an investor’s portfolio.

Through their strategic partnership, Franklin Templeton and SBI will aim to provide investors in Japan with greater access to a diversified range of investment solutions.

With over 100 indexed and active ETFs, Franklin Templeton’s global ETF platform has grown significantly, and has more than US$27 billion in assets under management as of June 30 2024.

As regulations related to digital assets and ETFs continue to evolve in Japan, the proposed JV will leverage Franklin Templeton's experience with tokenized money market funds and digital assets-backed ETFs in the United States. This, combined with SBI's in-depth expertise as a leader in Japan's digital asset space, will help offer innovative solutions that meet investors’ evolving interests and objectives in the Japanese market, according to the two firms.