FSYD vs SPHY

FSYDCFidelity Sustainable High Yield ETF

SPHYAState Street SPDR Portfolio High Yield Bond ETF

In short

FSYD Junk bonds with a screen. FSYD reaches for high income in below-investment-grade debt, but only from issuers with proven or improving sustainability practices, with a quality-and-value quant model doing the picking.

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

FSYD The fund seeks a high level of income and may also pursue capital appreciation. It primarily invests in below-investment-grade debt securities issued by companies with proven or improving sustainability practices.

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

• FSYD Rare combo: a high-yield bond fund built around a sustainability test rather than plain credit beta. What the label promises and what the portfolio holds line up closely.
• The screen sits in the prospectus, not the brochure: below-investment-grade issuers with proven or improving sustainability practices, sorted by a quality-and-value quant model.
• Spreads credit risk across roughly 400 bond positions and pays income monthly.
• Measured against the ICE BofA US High Yield Constrained Index, the same yardstick used by plain-vanilla giants like USHY, so the effect of the screen is easy to compare.

• 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

• FSYD At 0.55% a year it sits above the high-yield median of 0.40%, and index rivals like SCYB (0.03%) and SPHY (0.05%) cost a fraction. The screening work is the bill.
• Thinly traded and small next to the category's heavyweights, so limit orders and patience matter on the way in and out.
• Below-investment-grade debt carries credit risk: prices move with default worries in ways investment-grade bonds generally do not.

• 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 FSYD profile⁠

Full SPHY profile⁠