SCYB vs YLD

SCYBASchwab High Yield Bond ETF

YLDBPrincipal Active High Yield 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.

YLD Most high yield ETFs just clone an index. YLD is the hand-built version: Principal's credit team blends junk bonds with senior floating-rate bank loans, at roughly what the average high yield ETF charges.

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.

YLD The Fund seeks long-term growth of capital through investments that include high-yield bonds and bank loans.

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.

• YLD At 0.39% it costs about the category median (0.40%), unusual pricing for a fund where humans pick the credit instead of copying an index.
• Bank loans are in the toolkit. Managers can mix junk bonds with senior floating-rate loans, Treasuries and preferreds, levers a plain index tracker doesn't pull.principalam.com
• Live since 2015 and pays monthly, so it has traded through real credit cycles rather than arriving with a backtest.
• Moderately traded, and it lands in the upper half of its high yield peer group on our review.

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.

• YLD Index rivals are far cheaper: SCYB at 0.03%, SPHY and HYLB at 0.05%, USHY at 0.08%. The active call is what you're paying up for.
• Junk credit is the whole point here. Below-investment-grade bonds and bank loans can move hard when credit spreads widen.principalam.com
• No index to check the manager against, and a book of roughly 150 positions, so results ride on the credit team's calls.principalam.com

Full SCYB profile⁠

Full YLD profile⁠