SCYB vs VSHY

SCYBASchwab High Yield Bond ETF

VSHYBVirtus Newfleet Short Duration High Yield Bond ETF

In short

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.

VSHY Junk bonds without the long fuse. VSHY runs an active high yield portfolio with duration held to one to three years, so rate swings land lighter than on full-length index rivals.

Stated mandate

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.

VSHY The Fund seeks a high level of current income and, secondarily, capital appreciation.

Why people hold it

• 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.

• VSHY The mandate is the point: managers target a one to three year duration, taking high yield credit risk without full-length interest rate exposure.virtus.com
• Actively run, not index-bound. Newfleet's team buys on relative value and can add floating rate bank loans instead of owning whatever an index dictates.virtus.com
• A 0.39% fee sits near the middle of the high yield ETF pack, unusual for active bond management.
• Pays monthly, spreads credit across roughly 200 positions, and has been trading since 2016.

Worth knowing

• 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.

• VSHY Small fund, thin volume. The bid-ask spread can matter more to your cost here than the expense ratio does.
• Index giants cost far less: SCYB, SPHY and USHY all charge under a tenth of a percent for broad high yield.
• Short duration softens rate moves, not default risk. These are below-investment-grade bonds, and the fund may reach into emerging markets and bank loans.virtus.com

Full SCYB profile⁠

Full VSHY profile⁠