The fund primarily invests in US sub-investment-grade, high-yield corporate bonds. Rather than simply tracking a benchmark index, the manager builds the portfolio by selecting securities with differentiated credit profiles based on their own judgment.

It suits investors who want higher dividend income than conventional bonds offer and who want to manage the volatility of high-yield bonds through active management.

Franklin Templeton launched this actively managed ETF in 2018.

The fund closely analyzes each company's financial health and cash flow to identify high-yield bonds with strong repayment capacity. It diversifies holdings to avoid excessive concentration in any single sector or company, and adjusts duration and credit exposure to suit the macroeconomic environment.

• Flexible credit risk management through active oversight
• Regular cash flow through monthly dividend payments

Assets under management (AUM) stand at $1.2B, and the expense ratio is 0.40% per year.

Compared with passive ETFs that track an index, such as HYG and JNK, the fund aims to generate additional returns through the manager's security selection skill while maintaining an efficient cost structure.

Solid corporate earnings and persistently low default rates have kept the high-yield bond market broadly stable, and high coupon income is supporting performance.

As the view that interest rates have peaked gains traction, capital is flowing into high-yield bonds, which offer relatively high yields, and trading is becoming more active as risk appetite recovers.

It is an efficient income tool that can deliver a high dividend yield, but investors should be mindful of the credit risk and volatility that can emerge during an economic slowdown.

USHY and SPHY, shown in the table, are passive alternatives that offer exposure to the entire high-yield market at very low fees. Meanwhile, ANGL and FALN focus on "fallen angel" bonds, which have been downgraded from investment grade, and aim for differentiated performance. If you want to broaden your scope to stable investment-grade corporate bonds, LQD is also worth considering.

FLHY is an active strategy that pursues high returns, so before investing, please review the key checklist below to carefully confirm the risks and management characteristics inherent to high-yield bonds.

High-yield bonds react far more sensitively to economic conditions than ordinary government bonds. In particular, investors should recognize that price volatility can increase sharply if deterioration in corporate earnings becomes visible.

It is a suitable product for investors who seek stable monthly income while using professional management to keep credit risk in check. Allocating a portion of total assets to it works well as a way to raise the income weighting of a portfolio.