HYLB vs HYZD

HYLBAXtrackers USD High Yield Corporate Bond ETF

HYZDCWisdomTree Interest Rate Hedged High Yield Bond Fund

In short

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.

HYZD High yield credit with the rate risk hedged out. HYZD tracks an index that holds a broad basket of US junk bonds at roughly zero duration, so what you own is the credit call, not the rate call. WisdomTree has run it since 2013.

Stated mandate

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.

HYZD The Fund seeks to track the price and yield performance, before fees and expenses, of the WisdomTree U.S. High Yield Corporate Bond, Zero Duration Index.

Why people hold it

• 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).

• HYZD The whole point: it tracks a zero-duration index, so the outcome rides on corporate credit rather than on where Treasury yields go.
• Roughly 500 US high yield bonds sit behind the hedge, and income is paid monthly.
• Rules-based index tracking rather than a manager's rate call, live since 2013 and through several rate cycles.

Worth knowing

• 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.

• HYZD 0.43% a year sits a shade above the typical high yield ETF, and vanilla rivals go far cheaper (SCYB 0.03%, SPHY 0.05%). The hedge is what you pay up for.
• The hedge cuts both ways: stripping duration also strips out the price lift a standard high yield fund gets when rates fall.
• Mid-sized and moderately traded rather than a category heavyweight, so spreads can run wider than at the largest high yield ETFs.

Full HYLB profile⁠

Full HYZD profile⁠