Fixed Income: U.S. - Corporate High Yield

USHY Top Performer Intra-day
Price $50.09
Today’s Change +0.22%(0.44)
1:10pm 11/24/2017
JPHY Bottom Performer Intra-day
Price $51.31
Today’s Change -0.11%(-0.21)
1:10pm 11/24/2017
  • Overview
  • Efficiency
  • Tradability
  • Fit

ETF.com Insight

The U.S. Corporate High Yield Fixed Income segment offers a wide array of choices; each offers a different spin on the market. The two leading ETFs by assets—JNK and HYG—aim toThe portfolios all look different. provide broad, plain vanilla exposure, but still differ significantly from our benchmark due to their respective liquidity screens. Other ETFs apply less stringent liquidity screens, but slice the market up in different ways. QLTC only holds lower-quality bonds (those rated B or below). PHB screens and weights its portfolio based on the strength of issuer fundamentals. ANGL only holds bonds that were downgraded to high yield from investment grade. THHY, HYHG, and HYGH aim to capture only the credit spread while hedging out duration risk. Last but not the least, HYLD is an actively managed fund that aims to beat, rather than mimic, the market.
As a result, the portfolios all look different. Yields range from THHY's 4.7% to QLTC's 7.0%, and credit ratings similarly range from PHB's BB- down to QLTC's B-. The most popular funds in the segment, HYG and JNK, both have weighted average B credit ratings, and yields of 6% or more. ANGL searches for yield by taking on more interest rate risk, reflected by its average duration—the segment's highest. THHY, HYHG, and HYGH forgo some yields to achieve duration-hedged portfolios.
Expense ratios in the segment range from JNK and ANGL's 40 bps to HYLD's 118 bps, with most of the funds charging between 40 and 55 bps. HYG and JNK are by far the most liquid funds in the segment, but HYG is the best fund from an all-in costs perspective due to its superior liquidity and tracking prowess. HYLD's market has matured rapidly, so access through retail trades should be easy and fair. PHB also possesses reasonable liquidity. However, ANGL, QLTC and QLTB are likely to be difficult to trade at fair prices. (Insight updated 11/22/17)

All Funds (19)

HYG $18.61 B 18612500680 Most liquid

B 72
E
83
83
T
94
94
F
72
72

JNK $11.91 B 11910709294.691 Highly liquid

C 78
E
77
77
T
76
76
F
78
78

ANGL $1.15 B 1150222022.15 Downgraded bonds

C 70
E
81
81
T
73
73
F
70
70

JPHY $45.94 M 45936000 N/A

C 69
E
80
80
T
58
58
F
69
69

PHB $1.12 B 1123379200 Fundamentals-based

C 66
E
81
81
T
73
73
F
66
66

HYHG $143.23 M 143225000 Duration-hedged

C 50
E
74
74
T
65
65
F
50
50

HYGH $136.29 M 136287300 Long HYG, short Treasuries

C 0
E
83
83
T
67
67
F
0
-1

FALN $17.76 M 17759170 N/A

D 70
E
65
65
T
60
60
F
70
70

HYXE $10.23 M 10227880 N/A

D 70
E
62
62
T
54
54
F
70
70

HYIH $10.4 M 10397273.105 Interest Rate Hedged

D 51
E
75
75
T
46
46
F
51
51

HYLB $338.92 M 338919550.585 N/A

D 0
E
70
70
T
70
70
F
0
-1

HYLD $157.5 M 157495197 Actively managed and expensive

D 0
E
69
69
T
54
54
F
0
-1

HYLV $105.52 M 105520825.124 N/A

F 0
E
59
59
T
43
43
F
0
-1

HYDB $10.08 M 10075600 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

GHYB $52.25 M 52248000 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

USHY $64.5 M 64497940 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

WFHY $5.18 M 5175330 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

THHY $4.76 M 4759631 Thin Volume

F 50
E
65
65
T
45
45
F
50
50

QLTC $11.67 M 11669025 Higher credit risk, higher yield

D 74
E
80
80
T
27
27
F
74
74

ETF.com Grade as 11/16/17

Fixed Income: U.S. - Corporate High Yield

Performance Dispersion
Performance  [as of 11/21/17] 1 Month 3 Month YTD 1 Year 3 Years 5 Years 10 Years
Benchmark: Barclays U.S. Corporate High Yield Index--------------
B 71.676708HYG18612500680HYGiShares iBoxx $ High Yield Corporate Bond ETF-0.74%1.38%5.68%8.05%3.90%4.69%5.96%
C 77.543372JNK11910709294.691JNKSPDR Bloomberg Barclays High Yield Bond ETF-0.73%1.41%5.51%8.13%3.24%4.29%--
C 70.314719ANGL1150222022.15ANGLVanEck Vectors Fallen Angel High Yield Bond ETF-0.70%2.60%8.64%10.74%8.76%8.60%--
C 68.610866JPHY45936000JPHYJPMorgan Disciplined High Yield ETF-0.72%1.14%5.48%7.32%------
C 65.665892PHB1123379200PHBPowershares Fundamental High Yield Corporate Bond Portfolio-1.10%0.59%3.86%5.73%4.05%4.31%3.28%
C 49.899901HYHG143225000HYHGProShares High Yield-Interest Rate Hedged ETF-0.57%2.30%3.86%7.85%2.17%----
C 0HYGH136287300HYGHiShares Interest Rate Hedged High Yield Bond ETF-0.57%2.48%5.86%8.67%3.36%----
D 69.817817FALN17759170FALNiShares Fallen Angels USD Bond ETF-0.59%2.32%8.03%10.70%------
D 69.65242HYXE10227880HYXEiShares iBoxx $ High Yield ex Oil & Gas Corporate Bond ETF-1.55%-0.23%5.17%6.95%------
D 50.894913HYIH10397273.105HYIHXtrackers High Yield Corporate Bond Interest Rate Hedged ETF-0.21%2.22%3.47%6.79%------
D 0HYLB338919550.585HYLBXtrackers USD High Yield Corporate Bond ETF-0.78%1.25%5.61%--------
D 0HYLD157495197HYLDAdvisorShares Peritus High Yield ETF0.19%2.79%7.76%11.39%-0.70%1.65%--
F 0HYLV105520825.124HYLVIQ S&P High Yield Low Volatility Bond ETF-0.54%0.99%----------
N/A 0HYDB10075600HYDBiShares Edge High Yield Defensive Bond ETF-0.70%1.74%----------
N/A 0GHYB52248000GHYBGoldman Sachs Access High Yield Corporate Bond ETF-0.48%------------
N/A 0USHY64497940USHYiShares Broad USD High Yield Corporate Bond ETF--------------
N/A 0WFHY5175330WFHYWisdomTree Fundamental U.S. High Yield Corporate Bond Fund-0.07%0.07%2.22%4.83%------
F 50.310881THHY4759631THHYVanEck Vectors Treasury-Hedged High Yield Bond ETF1.40%2.12%3.09%8.50%3.36%----
D 73.82515442QLTC11669025QLTCiShares B-Ca Rated Corporate Bond ETF1.34%6.75%17.92%8.46%4.33%----
All returns over 1 year are annualized. All returns are total returns unless otherwise stated.

ETF.com Efficiency Insight

Corporate high-yield bond funds charge a wide range of fees. JNK and ANGL charge a segment-leading 40 bps, while all but one of the remaining funds charges between 50 and 55 bps. At theHYG is in a league of its own other end of the spectrum, HYLD charges a whopping 118 bps for its actively managed strategy.
However, a fund's ability to track its underlying index is a better indicator of true holding costs than its stated expense ratio. In that respect, HYG is in a league of its own. Despite its 50 bp expense ratio, it tracks its underlying index consistently well. It has, in fact, consistently clawed back much if not all of its expense ratio. In contrast, most of the other funds struggle in tracking their indexes consistently. Their median tracking errors are typically of multiples of their stated expense ratios. Since HYLD doesn't track an index, tracking is not an issue. However, its high fees will eat into investors' returns.
This segment is home to four popular ETFs—HYG, JNK, HYLD and PHB. HYG leads the group, with over $10B, and JNK isn't far behind. PHB and HYLD are a step down, with about $500M each—still a very respectable amount which points to fund stability. While HYHG and HYGH don't have stellar asset levels, their AUMs are large enough to ward off closure risk. By comparison, the three remaining ETFs all have less than $50M in AUM. These low asset levels put these funds at risk of getting shut down. (Insight updated 11/22/17)

All Funds (19)

83
82.680377
83
82.608327
81
81.160837
81
81.068869
80
80.111204
77
77.084606
75
74.615041
74
73.585365
70
69.694415
69
69.210811
65
64.98757
62
62.453664
59
58.67973
N/A
0
N/A
0
N/A
0
N/A
0
65
64.716959
80
79.591643324607

ETF.com Grade as 11/16/17

Fixed Income: U.S. - Corporate High Yield

Tracking Difference (12 Month)

Ticker Expense Ratio Median Max. Upside Max. Downside Max LT/ST Cap Gains Rate Rule Legal Structure Fund Closure Risk Efficiency
ANGL VanEck Vectors Fallen Angel High Yield Bond ETF 0.35% -1.17% -0.46% -1.79% 20.00% / 39.60% Low 81.160837
FALN iShares Fallen Angels USD Bond ETF 0.25% -- -- -- 20.00% / 39.60% High 64.98757
HYG iShares iBoxx $ High Yield Corporate Bond ETF 0.49% -0.54% -0.24% -1.43% 20.00% / 39.60% Low 82.680377
HYXE iShares iBoxx $ High Yield ex Oil & Gas Corporate Bond ETF 0.50% -- -- -- 20.00% / 39.60% High 62.453664
HYGH iShares Interest Rate Hedged High Yield Bond ETF 0.54% -- -- -- 20.00% / 39.60% Low 82.608327
JPHY JPMorgan Disciplined High Yield ETF 0.40% -- -- -- 20.00% / 39.60% Medium 80.111204
HYHG ProShares High Yield-Interest Rate Hedged ETF 0.50% -1.91% -0.53% -2.56% 20.00% / 39.60% Low 73.585365
HYLB Xtrackers USD High Yield Corporate Bond ETF 0.20% -- -- -- 20.00% / 39.60% Low 69.694415
HYIH Xtrackers High Yield Corporate Bond Interest Rate Hedged ETF 0.35% -0.15% 0.48% -1.54% 20.00% / 39.60% High 74.615041
HYLV IQ S&P High Yield Low Volatility Bond ETF 0.40% -- -- -- 20.00% / 39.60% Low 58.67973
HYLD AdvisorShares Peritus High Yield ETF 1.25% -- -- -- 20.00% / 39.60% Low 69.210811
HYDB iShares Edge High Yield Defensive Bond ETF 0.35% -- -- -- 20.00% / 39.60% Low 0
JNK SPDR Bloomberg Barclays High Yield Bond ETF 0.40% -0.78% -0.30% -2.39% 20.00% / 39.60% Low 77.084606
GHYB Goldman Sachs Access High Yield Corporate Bond ETF 0.34% -- -- -- 20.00% / 39.60% Low 0
PHB Powershares Fundamental High Yield Corporate Bond Portfolio 0.50% -0.82% -0.69% -1.48% 20.00% / 39.60% Low 81.068869
USHY iShares Broad USD High Yield Corporate Bond ETF 0.22% -- -- -- 20.00% / 39.60% Low 0
WFHY WisdomTree Fundamental U.S. High Yield Corporate Bond Fund 0.38% -1.72% -1.22% -2.35% 20.00% / 39.60% High 0
THHY VanEck Vectors Treasury-Hedged High Yield Bond ETF -0.96% -0.10% -3.15% 20.00% / 39.60% Closing 64.716959
QLTC iShares B-Ca Rated Corporate Bond ETF -0.46% -0.12% -1.08% 20.00% / 39.60% Closing 79.591643324607

ETF.com Tradability Insight

HYG leads the segment in liquidity, with its median daily volume over $500M and 1 bp average spread. However, it is far from the only liquid fund here. JNK comes in at close second, with aHYG leads the segment in liquidity median daily volume around $300M and narrow spreads. PHB and HYLD are two other reasonably liquid choices, with median daily volumes over $5M and reasonable spreads.
HYHG, THHY, and HYGH are the duration hedged ETFs in the segment. However, HYHG is the only one with significant retail volume. HYGH can be traded in smaller amounts with some care. On the other hand, THHY require great care to trade in-and-out. Limit orders are a must for all three funds.
ANGL and QLTC are very difficult to trade. Both trade less than $150K most days with prohibitively wide spreads. Large investors are likely to get a better price with the assistance of a market maker. Use caution trading these funds in any size short of a full creation unit.
Since the high yield market has poor underlying liquidity in general, multiple creations/redemptions can move the prices of underlying securities against you. Be sure to work with market makers or call up issuers' capital market desks for best execution for large orders. (Insight updated 11/22/17)

All Funds (19)

94
94.254444
76
75.640007
73
73.431025
73
73.325142
70
70.401932
67
67.473746
65
64.597777
60
59.852815
58
57.751136
54
54.499761
54
53.671439
46
46.115646
43
42.805166
N/A
0
N/A
0
N/A
0
N/A
0
45
44.579708
27
27.474899555

ETF.com Grade as 11/16/17

Fixed Income: U.S. - Corporate High Yield

Ticker Median Daily Volume ($) Average Spread Creation Unit/Day Market Hours Overlap Underlying Volume/Unit % Creation Cost Per Unit (%) Impediment to Creations Score - Tradability
HYDB iShares Edge High Yield Defensive Bond ETF $15.22 K 0.13% 0.00 0.00%% -- 0.02% None 0
ANGL VanEck Vectors Fallen Angel High Yield Bond ETF $7.81 M 0.05% 5.21 100.00% 0%% 0.03% None 73.325142
GHYB Goldman Sachs Access High Yield Corporate Bond ETF $102.51 K 0.10% 0.04 -- -- 0.02% None 0
HYG iShares iBoxx $ High Yield Corporate Bond ETF $663.38 M 0.01% 75.07 100.00% -- 0.01% None 94.254444
USHY iShares Broad USD High Yield Corporate Bond ETF $15.05 K 0.09% -- -- -- 0.01% N/A 0
HYGH iShares Interest Rate Hedged High Yield Bond ETF $243.46 K 0.03% 0.05 100.00% 0.68% 0.00% None 67.473746
HYHG ProShares High Yield-Interest Rate Hedged ETF $502.03 K 0.44% 0.30 100.00% -- 0.03% None 64.597777
HYIH Xtrackers High Yield Corporate Bond Interest Rate Hedged ETF $20.99 K 0.43% 0.01 100.00% 11.05% 0.04% None 46.115646
HYLD AdvisorShares Peritus High Yield ETF $441.25 K 0.30% 0.24 100.00% 0%% 0.03% None 54.499761
JNK SPDR Bloomberg Barclays High Yield Bond ETF $256.79 M 0.03% 13.86 100.00% -- 0.00% None 75.640007
PHB Powershares Fundamental High Yield Corporate Bond Portfolio $6.55 M 0.05% 3.47 100.00% -- 0.03% None 73.431025
WFHY WisdomTree Fundamental U.S. High Yield Corporate Bond Fund $0 0.52% 0.00 100.00% -- 0.00% None 0
FALN iShares Fallen Angels USD Bond ETF $187.58 K 0.10% 0.13 100.00% -- 0.03% None 59.852815
HYXE iShares iBoxx $ High Yield ex Oil & Gas Corporate Bond ETF $0 0.10% 0.00 100.00% -- 0.04% None 53.671439
JPHY JPMorgan Disciplined High Yield ETF $257.93 K 0.16% 0.05 100.00% -- 0.01% None 57.751136
HYLB Xtrackers USD High Yield Corporate Bond ETF $4.55 M 0.06% 1.80 100.00% -- 0.02% None 70.401932
HYLV IQ S&P High Yield Low Volatility Bond ETF $66.63 K 0.14% 0.05 100.00% -- 0.04% None 42.805166
THHY VanEck Vectors Treasury-Hedged High Yield Bond ETF $3.28 K 0.00 100.00% 1.05% 0.02% None 44.579708
QLTC iShares B-Ca Rated Corporate Bond ETF $74.13 K 0.03 100.00% -- 0.02% None 27.474899555

ETF.com/ Block Liquidity

HYG
5
4
3
2
1
JNK
5
4
3
2
1
HYGH
5
4
3
2
1
HYHG
5
4
3
2
1
HYIH
5
4
3
2
1
FALN
5
4
3
2
1
HYXE
5
4
3
2
1
JPHY
5
4
3
2
1
ANGL
5
4
3
2
1
HYLD
5
4
3
2
1
PHB
5
4
3
2
1
WFHY
5
4
3
2
1
USHY
5
4
3
2
1
HYLB
5
4
3
2
1
HYLV
5
4
3
2
1
HYDB
5
4
3
2
1
GHYB
5
4
3
2
1
THHY
5
4
3
2
1
QLTC
5
4
3
2
1

This measurement shows how easy it is to trade 25,000 shares of each ETF.

ETF.com Fit Insight

[Insight as of 11/28/14] None of the funds in this segment perfectly captures the broad corporate high-yield debt market, for understandable reasons. After all, it's a market with poorNone of the funds in this segment perfectly captures the market liquidity. As such, many high yield indexes have built-in liquidity-friendly selection criteria which would take the indexes away from unconstrained market exposure. Additionally, most funds heavily optimize their portfolio out of necessity. The two funds, JNK and HYG, that try to capture the broad market implement stringent liquidity screens that prevent them from capturing the entire market. PHB also has a broad focus, but it only holds bonds from issuers with strong fundamentals, and weights those bonds based on issuer strength.
These three funds don't look much like each other, or like our benchmark. JNK overweights industrial debt and has the highest yield of the three. HYG has a slightly lower yield and shorter duration. The surprise here is PHB: Despite an elevated duration, it yields less than 6% thanks to a heavier allocation to higher-quality bonds.
The remaining funds all purposely tilt away from the market. QLTC only holds lower-quality bonds rated B and below. ANGL only holds bonds whose issuers fell from investment-grade to high-yield status, and HYLD actively tries to beat the market through active security selection. THHY, HYHG, and HYGH aim to capture only the credit spreads while hedging out duration risk by shorting Treasury futures.
Again, these different selection mechanisms result in very different portfolios. QLTC's weighted average credit rating and effective duration are both at the low-end of the segment. Despite having the longest effective duration, ANGL's yield is far from impressive in the context of this segment, due largely to its elevated credit quality. THHY, HYGH and HYHG are all reasonably close to their target of net zero duration.
HYLD is the moving target among its peers, as its actively managed portfolio ebbs and flows with the preferences of its manager, Peritus. According to the issuer, the current iteration of the portfolio has the lowest interest rate risk in the segment but generates the highest YTM. (Insight updated 11/22/17)

All Funds (19)

78
77.543372
72
71.676708
70
70.314719
70
69.817817
70
69.65242
69
68.610866
66
65.665892
51
50.894913
50
49.899901
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
50
50.310881
74
73.82515442

ETF.com Grade as 11/16/17

Fixed Income: U.S. - Corporate High Yield