Franklin Templeton’s tokenized high-yield bond ETF gets yield trading on Pendle

Franklin Templeton’s tokenized high yield bond ETF now has a market on Pendle through FLHYon, an Ondo-issued token tracking its FLHY fund. The market has a 2026 maturity, allowing traders to trade future income from the asset separately—but holding the token does not mean owning ETF shares directly.

Key takeaways

• Ondo issues FLHYon and holds its backing assets.
• Pendle hosts yield trading, not token issuance or custody.
• FLHYon’s on-chain assets totaled roughly $497,000 in October 2026.

According to Crypto Briefing, FLHYon gives holders economic exposure to Franklin Templeton’s high yield corporate bond ETF, including dividend reinvestments. The token operates primarily on Ethereum and also serves as collateral on Morpho.

How the tokenized high yield bond ETF is backed

Ondo Global Markets (BVI) Limited issues FLHYon, while Ondo holds the underlying assets. The structure is designed to maintain 1:1 backing, with cash in transit supporting liquidity.

The distinction between exposure and ownership is central to the product: holders participate in the ETF’s economic performance, including reinvested dividends, but do not directly own FLHY shares. Pendle has no direct role in this issuance or backing structure.