QHY vs SPHY

QHYAWisdomTree U.S. High Yield Corporate Bond Fund

SPHYAState Street SPDR Portfolio 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.

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

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

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

• 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.

• 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

• 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.

• 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 QHY profile⁠

Full SPHY profile⁠