FLHY vs SCYB

FLHYAFranklin High Yield Corporate ETF

SCYBASchwab High Yield Bond ETF

In short

FLHY Franklin's high yield ETF is income-first by charter: the prospectus puts current income at the top and capital appreciation a distant second. About 300 corporate bonds, monthly payouts, category-median cost.

SCYB Three basis points for the broad US high-yield corporate market. Schwab undercuts a category where the typical fund charges more than ten times as much, spreading the bet across roughly 1,800 bonds and paying monthly.

Stated mandate

FLHY The Fund seeks high current income and, secondarily, capital appreciation when consistent with its primary income goal.

SCYB The fund follows a rules-based strategy intended to track the high-yield bond market, primarily through bonds in the Bloomberg Barclays US Corporate High Yield Total Return Index and similar derivatives.

Why people hold it

• FLHY The mandate is blunt. High current income comes first; capital appreciation only when it fits the income goal. Cash goes out monthly.
• It stays in its lane: a corporate high yield book that matches the mandate it advertises, with no drift into off-label credit.
• Top-quartile standing in a field of more than 90 high yield ETFs, and Franklin has run it since 2018. Assets sit in the billion-plus range.

• SCYB 0.03% a year against a category median of 0.40%. Even the cheap rivals sit above it: SPHY at 0.05%, USHY at 0.08%.
• Tracks the same Bloomberg US Corporate High Yield index as BKHY, which charges 0.22%. Same map, cheaper toll.
• Roughly 1,800 bonds, so no single issuer's blowup drives the outcome. Rules-based and passive, and it has hugged its index closely.
• A multi-billion-dollar fund that trades actively and pays monthly, which matters in a corner of the market where getting out cheaply is half the job.

Worth knowing

• FLHY The 0.40% fee is the category median, but the cheap index trackers in this cohort charge a fraction: SCYB 0.03%, SPHY 0.05%, USHY 0.08%.
• Junk bonds by design. Below-investment-grade credit moves with corporate stress, so it behaves more like a risk asset than like Treasuries.
• About 300 bonds is a compact book for credit, so a single issuer's trouble carries more weight. Trading volume is moderate, not mega-fund heavy.

• SCYB High yield means below-investment-grade credit. These bonds behave more like stocks than Treasuries when the economy sours, and the extra income is the payment for that risk.
• Launched in 2023, so it has a shorter record than rivals that have traded through more credit cycles.
• The strategy can hold derivatives alongside the bonds themselves to track the index, one layer beyond plain bond ownership.

Full FLHY profile⁠

Full SCYB profile⁠