FDHY vs HYLB

FDHYBFidelity Enhanced High Yield ETF

HYLBAXtrackers USD High Yield Corporate Bond ETF

In short

FDHY Most high yield ETFs just buy the index. FDHY is Fidelity's active, quant-driven version: value and quality screens run against a BB-B benchmark, priced below the typical fund in the category.

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

FDHY The fund seeks a high level of income and may also pursue capital appreciation. It uses a quantitative, rules-based approach intended to exploit market inefficiencies.

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

• FDHY Active where most of the category is passive. A rules-based value and quality screen picks the bonds, measured against the ICE BofA BB-B US High Yield Constrained Index.
• 0.35% a year undercuts the 0.40% median for high yield ETFs, unusual for a fund with a manager and a research process behind it.
• Income lands monthly, and the strategy has been running in ETF form since 2018, not a recent launch chasing a theme.

• 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

• FDHY Plain index rivals cost a fraction: SCYB at 0.03% and SPHY at 0.05%. You are paying for the selection process, so it has to earn the gap.
• About 300 bonds is a tighter net than the broad trackers that own the whole market, so individual credit calls carry more weight here.
• Trading is moderate rather than heavyweight next to the largest high yield ETFs, which can matter on bigger or faster orders.

• 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 FDHY profile⁠

Full HYLB profile⁠