USHY vs YLD

USHYAiShares Broad USD High Yield Corporate Bond ETF

YLDBPrincipal Active High Yield ETF

In short

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.

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

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

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

Why people hold it

• 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.

• 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

• 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.

• 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 USHY profile⁠

Full YLD profile⁠