QHY vs USHY

QHYAWisdomTree U.S. High Yield Corporate Bond Fund

USHYAiShares Broad USD High Yield Corporate 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.

USHY The wide-angle lens on junk bonds: about 1,900 US dollar high yield corporate issues for 0.08% a year, a fifth of what the typical fund in its category charges. Broad, cheap, heavily traded, and it pays 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.

USHY The fund seeks to track an index of U.S. dollar-denominated high yield corporate bonds.

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.

• USHY Charges 0.08% a year while the median high yield fund in its cohort runs 0.40%. Cheap rent on an expensive-to-run corner of the bond market.
• Holds about 1,900 bonds against the ICE BofA US High Yield Constrained Index: the broad market, not a curated slice of the most liquid names.ishares.com
• A multi-billion-dollar fund and one of the more actively traded in high yield, which tends to keep bid-ask spreads thin even on busy days.
• Pays monthly and has tracked its index tightly since its 2017 launch, one of the closer index matches in its peer group.

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.

• USHY High yield means below-investment-grade borrowers. When credit gets stressed this asset class drops with stocks instead of cushioning them.
• Cheaper tickets sit on the same shelf: SCYB at 0.03% and SPHY at 0.05%.
• This is a fund, not a bond ladder. No maturity date hands your principal back; the basket rolls on indefinitely.

Full QHY profile⁠

Full USHY profile⁠