FALN vs HYLB

FALNBiShares Fallen Angels USD Bond ETF

HYLBAXtrackers USD High Yield Corporate Bond ETF

In short

FALN Downgrades are the shopping list. FALN holds dollar bonds that were investment grade until the ratings cut, keeps any one issuer to 3% of the index, and charges 0.25% for it. Roughly 160 bonds, income paid monthly.

HYLB Broad-market junk bonds at index-fund pricing: 0.05% a year, a fraction of what the typical high-yield bond ETF charges, spread across roughly 1,300 issues. Running since 2016, it pays monthly.

Stated mandate

FALN The Fund seeks to track an index of U.S. dollar-denominated high-yield corporate bonds that were previously rated investment grade.

HYLB The fund seeks to track, before fees and expenses, the Solactive USD High Yield Corporates Total Market Index. It uses a passive representative-sampling indexing approach.

Why people hold it

• FALN The whole idea: every bond here started life investment grade and got cut to junk. That is a different slice of high yield than a plain market-weighted junk index.ishares.com
• 0.25% a year, below what the typical high-yield ETF charges, for a screen that most junk-bond funds do not run.
• The index caps any single issuer at 3%, so one blown-up borrower cannot swamp the roughly 160-bond basket.
• Running since 2016, now a multi-billion-dollar iShares fund that tracks its index closely. One of the stronger builds in the high-yield group.

• HYLB 0.05% expense ratio puts it at the low end of the high-yield ETF field, matching SPHY and undercutting USHY's 0.08%. Fee drag matters most where yield is the whole point.
• Total-market mandate, not a filtered slice: roughly 1,300 bonds sampled from the Solactive USD High Yield Corporates Total Market Index.
• Tracking has been tight against its stated index, and it trades actively enough to keep spreads workable. One of the cleaner implementations in the high-yield group.
• Monthly distributions, with a live record going back to a 2016 launch (through the 2020 credit shock and the 2022 rate spike).

Worth knowing

• FALN Still junk debt. When credit spreads widen, these bonds fall with the rest of high yield, and the ride is bumpier than investment-grade credit.
• Downgrade waves are lumpy. The basket fills with whichever industry is getting cut, so the sector mix can look nothing like a broad high-yield fund.
• Broad high-yield rivals such as SCYB and SPHY charge single-digit basis points. The fallen-angel screen costs extra.

• HYLB This is the credit-risk end of the bond market. Below-investment-grade issuers default more often, and prices can fall hard when spreads widen.
• Representative sampling means it holds a subset of the index, not every bond, so results can drift slightly from the benchmark.
• Cheap, but not the floor: SCYB runs 0.03%. HYLB is also a mid-sized fund next to the largest names in the category.

Full FALN profile⁠

Full HYLB profile⁠