HYGH vs SCYB

HYGHBiShares Interest Rate Hedged High Yield Bond ETF

SCYBASchwab High Yield Bond ETF

In short

HYGH High yield income with the rate risk engineered out: it owns iShares' flagship junk bond ETF and layers short interest rate swaps on top, leaving credit spreads as the main driver. A pure spread play, running since 2014.

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

HYGH The Fund seeks to track an index combining high-yield corporate-bond exposure with interest-rate hedges intended to reduce sensitivity to rising rates.

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

• HYGH Owns iShares' flagship high yield corporate bond ETF and layers short interest rate swaps on top, rebalanced daily, so Treasury yield moves are largely netted out.ishares.comishares.com 2
• The index uses up to 10 swap contracts across different maturities, designed to benefit when the floating reference rate rises above the fixed rate paid.sec.govishares.com
• Trading since May 2014, so there is a decade-plus of live history behind the mechanism, and it pays monthly.

• 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

• HYGH Costs 0.52% net of a waiver through February 28, 2027 (1.12% gross), above the category median; plain trackers like SCYB at 0.03% and SPHY at 0.05% keep full duration.
• The hedge targets rates, not credit. Defaults and spread widening in below investment grade bonds still flow straight through.ishares.com
• Income nets the underlying fund's yield against fees and the cost of carry on the hedges, so the payout can differ from unhedged high yield.ishares.com

• 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 HYGH profile⁠

Full SCYB profile⁠