EUHY vs SCYB

EUHYBiShares Euro High Yield Corporate Bond USD Hedged ETF

SCYBASchwab High Yield Bond ETF

In short

EUHY US junk-bond ETFs are everywhere. EUHY goes the other direction: euro-denominated European high yield, with the euro exposure hedged back to dollars. European credit risk, without the currency ride.

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

EUHY The fund seeks to track USD-hedged, euro-denominated high-yield bonds, providing euro high-yield exposure while reducing euro-to-dollar currency fluctuations.

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

• EUHY Tracks the Bloomberg Pan-European High Yield (Euro) 100% Hedged to USD Index, so you hold European credit spreads with euro-to-dollar swings hedged out.
• Costs 0.35% a year, below the 0.40% median for high-yield bond ETFs.
• Spread across roughly 700 bonds, so no single issuer carries the fund.
• Trading since 2012 inside BlackRock's iShares lineup, a long run for such a narrow corner of the bond market.

• 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

• EUHY Thinly traded. Bid-ask spreads can run wider and larger orders move the price more than in the household-name high-yield funds.
• Cheap for its cohort, not for high yield generally: US-focused funds like SCYB and SPHY charge a fraction. The European mandate and the hedge cost extra.
• The hedge cuts both ways, stripping out euro gains as well as euro losses, and payouts land on an irregular schedule rather than a fixed monthly rhythm.

• 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 EUHY profile⁠

Full SCYB profile⁠