SPHY vs YLD

SPHYAState Street SPDR Portfolio High Yield Bond ETF

YLDBPrincipal Active High Yield ETF

In short

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.

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

SPHY The fund seeks to track, before fees and expenses, the price and yield performance of the ICE BofA US High Yield Index.

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

Why people hold it

• 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.

• 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

• 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

• 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 SPHY profile⁠

Full YLD profile⁠