State Street and Fidelity both launched actively managed high yield ETFs on Thursday, but with slightly different twists on the asset class.
The SPDR Blackstone High Income ETF (HYBL) launched on the Cboe Global Markets with an expense ratio of 0.70%, while Fidelity Sustainable High Yield ETF (FSYD) launched on the NYSE Arca with an 0.55% annual fee.
HYBL, at the direction of subadvisor BlackStone, will hold a combination of high yield bonds, senior loans and up to 15% of its assets in collateralized loan obligation tranches based on top-down economic research.
The fund aims to outperform a hybrid benchmark made up of the ICE BofA US High Yield Constrained Index with its bond holdings and the S&P/LSTA Leveraged Loan Index with its senior loan holdings.
The fund is the second collaboration between State Street and Blackstone, almost nine years after the $9.95 billion SPDR Blackstone Senior Loan ETF (SRLN) debuted. SLRN most recently posted a standardized yield of 4.38%.
FSYD uses Fidelity’s in-house ESG ratings systems to pick bonds that companies deemed to deliver “tangible impact” on environmental issues, and social issues like diversity, data privacy, product safety and board independence. It uses the ICE BofA US High Yield Constrained Index as a benchmark for credit quality distribution and risk profile.
It launches against three other existing ESG junk bond funds with nearly $285 million in combined assets: the Xtrackers J.P. Morgan ESG USD High Yield Corporate Bond ETF (ESHY), the Nuveen ESG High Yield Corporate Bond ETF (NUHY) and the iShares ESG Advanced High Yield Corporate Bond ETF (HYXF). Those funds have 30-day yields of 4.19% for HYXF and 5.55% for ESHY.
FYSD is more expensive than those funds, with a 20-basis-point premium over HYXF and a 35 basis point premium over ESHY.