QHY vs SCYB

QHYAWisdomTree U.S. High Yield Corporate Bond Fund

SCYBASchwab High Yield Bond ETF

In short

QHY Most high-yield ETFs buy the market and move on. QHY runs a rules-based index that screens U.S. junk-bond issuers on profitability and tilts toward value, holding roughly 500 bonds instead of a plain cap-weighted sweep.

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

QHY The Fund seeks to track the performance of the WisdomTree U.S. High Yield Corporate Bond Index before fees and expenses.

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

• QHY The screen is the whole point: issuers get judged on profitability and priced-in value before they land in the portfolio, an unusual filter in a corner of the market that mostly weights by debt outstanding.
• 0.38% a year, which lands just under the median fee in the high-yield ETF crowd. Rare for a fund doing extra screening work rather than tracking the broad market.
• Roughly 500 bonds and monthly distributions, so single-issuer blowups get diluted and the income shows up on the cadence bond investors are used to.
• Live since 2016 with a track record of following its stated index closely, and it grades out in the upper half of 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

• QHY It's a small, thinly traded fund next to category heavyweights like SPHY and USHY, so bid/ask spreads and order size matter more here than with the giants.
• Plain cap-weighted rivals are far cheaper (SCYB at 0.03%, SPHY at 0.05%), so the fundamental screen is what you're paying the difference for.
• Screening doesn't remove credit risk. These are below-investment-grade U.S. corporate bonds, and they tend to move with credit spreads, not with Treasuries.

• 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 QHY profile⁠

Full SCYB profile⁠