HYGH vs SPHY

HYGHBiShares Interest Rate Hedged High Yield Bond ETF

SPHYAState Street SPDR Portfolio 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.

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

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.

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

• 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.

• 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

• 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

• 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 HYGH profile⁠

Full SPHY profile⁠