It’s safe to say that active ETFs are here to stay. There have been hundreds of new funds launched in recent quarters, financial advisors and model makers have quickly added them to their client lists, and investors have continued to plow plenty of dollars into these funds. And it’s easy to see why. Offering low costs, tax advantages, and the ability to outperform, active ETFs are now the go-to vehicle for many investors. But even with all this torrid growth, every once in a while, a launch captures the attention of investors and the mainstream media.
In this case, we’re talking about J.P. Morgan’s latest fixed income active ETF launch.
J.P.Moragn’s latest fund managed to take the cake for the most extensive initial fund seeding of any active ETF. With several funds under its belt, the fund has continued to take on more assets. Proving that fixed income and bonds are the place to be when it comes to active funds.
J.P. Morgan’s Latest Record-Breaking Launch
A few firms really dominate the ETF ecosystem. And when it comes to active ETFs, a central money-centered bank, J.P. Morgan (JPM), could be king of the hill.
As one of the first players in the active space, JPM has been able to govern the landscape. Thanks to smart mutual fund-to-ETF conversions, internal client seeding, and innovation in terms of what an ETF can hold, the asset manager has quickly gathered assets at a fevered pace. JPMorgan Equity Premium Income ETF (JEPI) and JPMorgan Ultra-Short Income ETF (JPST) are two of the largest ETFs- active or passive- on the block, while the vast bulk of its active ETF suite holds a $1 billion-plus. All in all, the firm holds more than $55 billion in active ETF assets alone.
So, it’s impressive when JPM breaks another record – even before a fund starts trading. That’s what happened with its new JPMorgan Active High Yield ETF (JPHY)
JPHY launched back at the end of June 2025 with over $2 billion in initial assets. That’s a record for the most significant initial launch by an active ETF and is very impressive even when looking at passive/index funds as well. What’s really interesting is just who did the initial seeding.
While the press release for the fund didn’t mention it, looking at 13F filings shows that pension giant California Public Employees’ Retirement System, or CalPERS, made the initial $2 billion investment. 1
Major Significance
The fact that CalPERS initially seeded the ETF shouldn’t be taken lightly on a couple of fronts.
For starters, the pension is the largest fund in the U.S., with over $550 billion in assets. CalPERS has long been a fan and user of private markets, active management, alternatives, and other non-traditional asset classes in its portfolio. For example, a few years ago, the pension fund made a splash when it invested $4 billion into Blackstone’s BREIT real estate fund. At the same time, CEO Marcie Frost recently affirmed the pension fund’s commitment to private equity.
The fact that it chose a liquid, actively managed ETF for a portion of its bond allocation is substantial. Given its size and relationship with many top managers, it can do whatever it wants and has plenty of options available for investment in the space. But the fact that it chose a very liquid and low-cost fund to do so shouldn’t be taken lightly.
Ultimately, it underscores the value that active ETFs can provide investors of all sizes. By choosing the ETF, CalPERS gains all the benefits that you or I would- tax savings, liquidity, and the potential to outperform benchmarks all at lower costs than traditional hedge funds, SMAs, or other investment vehicles.
Secondly, the fact that the ETF itself is a bond fund is also important.
Fixed income is one of those sectors where active management can make a difference and outperform passive benchmarks. This is because managers don’t have to look like an index, which tends to overweight the biggest debtors and ignore many of the opportunities in the bond space. There are over 65,000 fixed-income securities in the U.S. alone, not to mention tens of thousands more worldwide.
Active managers can overweight segments, change durations, and buy values amid the wreckage. As such, many active bond funds can outperform their benchmarks consistently. This is especially true in the high-yield/junk bond space. According to asset manager PineBridge, active managers in the high-yield space beat passive ones over trailing one-, three-, five-, and 10-year periods, with its recent study showing that active managers have outperformed by as much as 0.7 basis points per year.
The combination of a big-time player support and active wins in fixed income provides plenty of tailwinds for the future of active ETFs as a portfolio tool for a variety of investors.
Should You Follow Suit?
Given that CalPERS is throwing some big-time bucks after a new bond ETF poses the question, is it a good deal for regular Joes? The answer could be a resounding yes. While JPHY has something to prove as a fund itself, the idea of using active ETF exposure for a bond portfolio is a sound one. In the end, active ETFs in the space offer plenty of appeal and benefits for our allocations. The fact that one of the largest pension funds on the planet is recognizing that point is essential.
Active Junk Bond ETFs
These funds are selected based on their ability to access high-yield bonds with an active touch. They are sorted by their YTD total return, which ranges from 1.3% to 4.7%. Their expense ratio ranges from 0.22% to 1.02%, while they have AUMs between $50M and $5.63B. They are currently yielding between 5.7% and 8.6%.
| Ticker | Name | AUM | YTD Total Ret (%) | Yield (%) | Exp Ratio | Security Type | Actively Managed? |
|---|---|---|---|---|---|---|---|
| FLHY | Franklin High Yield Corporate ETF | $268M | 4.7% | 5.7% | 0.40% | ETF | Yes |
| YLD | Principal Active High Yield ETF | $160M | 4.7% | 7.2% | 0.39% | ETF | Yes |
| HYBL | SPDR Blackstone High Income ETF | $136M | 4.4% | 8.2% | 0.70% | ETF | Yes |
| THYF | T. Rowe Price U.S. High Yield ETF | $50M | 4.1% | 7.5% | 0.56% | ETF | Yes |
| SRLN | SPDR Blackstone Senior Loan ETF | $5.63B | 3.8% | 8.6% | 0.70% | ETF | Yes |
| FTSL | First Trust Senior Loan Fund | $2.27B | 3.8% | 7.5% | 0.87% | ETF | Yes |
| BKHY | BNY Mellon High Yield Beta ETF | $292M | 3.4% | 6.9% | 0.22% | ETF | Yes |
| PHYL | PGIM Active High Yield Bond ETF | $124M | 3.4% | 8.2% | 0.39% | ETF | Yes |
| HYFI | AB High Yield ETF | $123M | 3.4% | 6.7% | 0.40% | ETF | Yes |
| HYLS | First Trust Tactical High Yield ETF | $1.43B | 1.3% | 6.4% | 1.02% | ETF | Yes |
Overall, J.P. Morgan’s new ETF and its CalPERS initial seeding will provide tailwinds for the active ETF movement, and we could see other pension funds, endowments, and institutional investors make similar moves- choosing a liquid, active ETF for their needs. At that point, it will be truly off to the races for the active ETF movement.
Bottom Line
J.P. Morgan has already been an active ETF pioneer, but now it is taking another record. Thanks to a $2 billion seeding from pension CalPERS, its new active bond ETF is already a hit. This only throws support towards active ETFs for fixed income and the active movement itself.
1 Pensions & Investments (August 2025). CalPERS seeds $2 billion launch of J.P. Morgan active high-yield ETF
