BKHY vs USHY

BKHYABNY Mellon High Yield ETF

USHYAiShares Broad USD High Yield Corporate 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.

USHY The wide-angle lens on junk bonds: about 1,900 US dollar high yield corporate issues for 0.08% a year, a fifth of what the typical fund in its category charges. Broad, cheap, heavily traded, and it pays 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.

USHY The fund seeks to track an index of U.S. dollar-denominated high yield corporate bonds.

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.

• USHY Charges 0.08% a year while the median high yield fund in its cohort runs 0.40%. Cheap rent on an expensive-to-run corner of the bond market.
• Holds about 1,900 bonds against the ICE BofA US High Yield Constrained Index: the broad market, not a curated slice of the most liquid names.ishares.com
• A multi-billion-dollar fund and one of the more actively traded in high yield, which tends to keep bid-ask spreads thin even on busy days.
• Pays monthly and has tracked its index tightly since its 2017 launch, one of the closer index matches in its peer group.

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.

• USHY High yield means below-investment-grade borrowers. When credit gets stressed this asset class drops with stocks instead of cushioning them.
• Cheaper tickets sit on the same shelf: SCYB at 0.03% and SPHY at 0.05%.
• This is a fund, not a bond ladder. No maturity date hands your principal back; the basket rolls on indefinitely.

Full BKHY profile⁠

Full USHY profile⁠