HYG vs SCYB

HYGBiShares iBoxx $ High Yield Corporate Bond ETF

SCYBASchwab High Yield Bond ETF

In short

HYG A 2007-vintage junk bond ETF built around liquidity: a multi-billion-dollar fund, heavily traded, tracking an index screened for the market's more tradable bonds. The trade-off is a fee well above the category's cheapest.

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

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

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

• HYG Running since 2007 and now a multi-billion-dollar fund that trades very actively, so thin days and wide spreads are rarely the sticking point.
• Follows the Markit iBoxx USD Liquid High Yield Index, which leans on larger, more tradable bonds instead of every scrap of paper in the junk market.ishares.com
• Income arrives monthly, and the mandate stays plain: a standard 1940 Act fund holding US dollar-denominated high-yield corporate bonds, index-tracked.
• Sticks closely to what its documents promise, and rates among the stronger implementations in a crowded high-yield field.

• 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

• HYG The 0.49% fee sits well above cheaper trackers like SCYB (0.03%) and SPHY (0.05%). You are paying for the trading ecosystem, not for cheaper exposure.
• High yield is below-investment-grade credit. When corporate stress rises, these bonds can move more like stocks than like Treasuries.
• The liquidity screen leaves out smaller issues, so coverage is narrower than broad-market rivals such as USHY.

• 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 HYG profile⁠

Full SCYB profile⁠