BKHY vs SPHY

BKHYABNY Mellon High Yield ETF

SPHYAState Street SPDR Portfolio High Yield Bond ETF

In short

BKHY Junk bonds, whole hog. BKHY mirrors the Bloomberg index that defines the US high yield market, roughly 1,600 issues deep, for 0.22% a year. A broad, low-fee tracker that happens to be one of the smaller names on the shelf.

SPHY State Street's junk-bond workhorse: roughly 1,900 US high yield bonds in one wrapper for 0.05% a year, a fraction of what the typical high yield ETF charges, with income paid monthly.

Stated mandate

BKHY The fund uses a rules-based, systematic strategy to track a high-yield bond index. It normally invests at least 80% of its assets in bonds from that index, while similar derivatives may also be used.

SPHY The fund seeks to track, before fees and expenses, the price and yield performance of the ICE BofA US High Yield Index.

Why people hold it

• BKHY Charges 0.22% a year, comfortably below the typical fee in the high yield ETF crowd.
• Holds roughly 1,600 bonds against the Bloomberg US Corporate High Yield Total Return Index, the market's standard benchmark, not a trimmed liquid subset of it.
• Rules-based by prospectus: at least 80% of assets in index bonds. It has hugged that benchmark about as closely as anything in its peer group.
• Distributions come monthly, not quarterly.

• SPHY 0.05% a year against a peer-group median about eight times higher. In high yield, the fee comes straight out of coupon income, so the gap does real work.
• Holds about 1,900 bonds tracking the ICE BofA US High Yield Index, broad enough that no single issuer's trouble dominates the portfolio.ssga.com
• Live since 2012, a multi-billion-dollar fund that trades actively and has stuck tightly to its stated index rather than drifting from the mandate.
• Distributions arrive monthly, in step with how the underlying coupons come in.

Worth knowing

• BKHY It trades thinly and runs small, so spreads can be wider and big orders can push the price more than in the category's heavyweights.
• SCYB tracks the same high yield index for a fraction of the fee, and SPHY and USHY sit in single-digit basis points too.
• High yield means below-investment-grade credit. This portfolio reacts to default worries and spread swings, not just interest rates.

• SPHY This is below-investment-grade credit. Defaults and spread moves drive the price far more than Treasury yields do, and sell-offs in this asset class can be sharp.
• Fees here are already near the floor: SCYB lists 0.03% and HYLB matches at 0.05%, so the cost edge over the strongest peers is narrow.
• Scope is US high yield corporates, full stop. No investment-grade ballast, no emerging market debt, nothing to soften a credit drawdown from inside the fund.ssga.com

Full BKHY profile⁠

Full SPHY profile⁠