What is an ETF and why do expense ratios matter?

An ETF, or exchange-traded fund, is a basket of securities that trades on a stock exchange, like a single share of stock. The expense ratio is an annual fee expressed as a percentage of the money you invest, charged by the fund manager to cover operational costs. These fees are deducted directly from the fund's assets, meaning higher fees can gradually erode your returns over long periods of time. It is essential to read and understand the fund's prospectus or financial reports to fully understand the fees and charges.

What is dividend yield?

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its share price. It is calculated by dividing the annual dividends per share by the price per share and is usually expressed as a percentage. For ETFs, it represents the income the fund aims to generate for investors. While yield is important, investors should also look at a company's earnings, debt levels, and cash flow when evaluating dividends.

What does 'high yield' mean in bonds?

In the context of bonds, 'high yield' refers to bonds that are rated below investment grade by credit rating agencies. These bonds carry a higher risk of default compared to investment-grade bonds. To compensate investors for taking on this additional risk, issuers of high yield bonds offer a higher interest rate or yield. This makes them an asset class focused on generating higher income, though they come with greater credit risk.

What is the difference between the expense ratios?

The expense ratio is the annual cost to hold the fund. According to the data, SPHY (Fund A) has an expense ratio of 0.05%, while USHY (Fund B) has a slightly higher ratio of 0.08%. This creates a difference of 0.03 percentage points in annual costs. This seemingly small difference means SPHY charges less per dollar invested than USHY. Over time, lower costs can be beneficial, as fees reduce the overall return an investor experiences.

How do these funds handle dividend payments?

Both funds are designed to provide income, as they invest in high yield corporate bonds that pay regular interest coupons. These funds will then typically pass this income on to shareholders via dividends. The data shows SPHY currently has a higher dividend yield at 7.26% compared to USHY's 6.99%. This means SPHY currently pays out a higher percentage of its share price as dividends. However, yields fluctuate based on changes in both the dividends paid and the fund's share price.

Are these funds' portfolio holdings transparent?

Based on the provided data, detailed information about the top holdings and sector weights for both funds is not available. This lack of specific data limits transparency for potential investors. Furthermore, the data suggests there are no shared top-10 holdings between SPHY and USHY, indicating they might hold different individual bonds within their portfolios. This distinct composition can influence each fund's specific risk and return characteristics.

Which fund is better for income investors?

Both SPHY and USHY are designed for investors seeking income from high-yield corporate bonds, but they offer different cost structures and yields. SPHY provides a higher dividend yield of 7.26% compared to USHY's 6.99%, and also boasts a lower expense ratio at 0.05% versus USHY's 0.08%. For investors specifically targeting higher income and lower annual fees, SPHY might be more appealing. However, USHY offers greater liquidity with net assets of $27.3 billion against SPHY's $12.0 billion.

What do these funds track?

This comparison shows both funds are in the High Yield Bond category. However, according to the data, the specific index tracked by each fund is not available. The names of the funds suggest the type of assets they hold. SPHY is a 'Portfolio' fund from SPDR, while USHY is an 'iShares Broad USD High Yield Corporate Bond ETF'. Without knowing the exact index, we cannot confirm if their exposures are identical or differ.

How big are these funds?

Net assets, or assets under management, are a measure of a fund's size. Based on the provided data, USHY is significantly larger, managing $27.3 billion in net assets. In contrast, SPHY is smaller, with net assets of $12.0 billion. Generally, larger funds may offer greater liquidity, making them easier to buy and sell without significantly impacting their market price. Smaller funds might experience wider bid-ask spreads and less trading volume.

Do the funds have similar histories?

The funds have different operational histories. SPHY has a longer track record, having been founded on 18 June 2012. USHY is a more recent fund, with an inception date of 25 October 2017. This means SPHY has about five more years of data and experience in the market. A longer history can sometimes provide more data on how a fund behaves through different market cycles, though past performance is never a guarantee of future results.

What should I know about this comparison?

This comparison is for educational purposes only and does not constitute financial advice. The information provided is based on a snapshot of fund data and may change over time. Key metrics like expense ratios, dividend yields, net assets, and holdings are subject to change. Investors should conduct their own comprehensive research and consider consulting with a qualified financial professional before making any investment decisions based on this comparison.

SPHY vs USHY

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

This page compares SPDR Portfolio High Yield Bond ETF (SPHY) and iShares Broad USD High Yield Corporate Bond ETF (USHY) across fees, holdings and dividends. It also looks at how each fund tracks its market. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

SPHY

Metric

USHY

0.05%

Expense Ratio

0.08%

7.26%

Dividend Yield

6.99%

$11.98B

Net Assets

$27.27B

1,926

Holdings

1,900

Jun 18, 2012

Inception Date

Oct 25, 2017

–

Index Tracked

–

High Yield Bond

Fund Category

High Yield Bond

SPHY costs about $3.00 less per year for every $10,000 invested.

Shared Top Holdings

These funds do not share any of their top holdings.

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Investment Analysis

SPHY

Pros

SPHY offers a significantly lower expense ratio of 0.05% compared to its larger competitor USHY.
It provides a higher dividend yield of 7.26%, appealing to investors seeking enhanced income generation.
The fund boasts a longer track record with an inception date of June 2012, demonstrating stability.

Considerations

Net assets of $12.0 billion are lower than USHY, potentially affecting liquidity during market stress.
Top holdings and sector weights data are not available, limiting detailed portfolio transparency for investors.
It shares no top-10 holdings with USHY, indicating distinct portfolio compositions and potentially different risk profiles.

USHY

Pros

USHY manages substantial net assets of $27.3 billion, suggesting enhanced liquidity and broader market acceptance.
The fund offers a competitive dividend yield of 6.99%, providing attractive income despite a slightly lower expense ratio.
An inception date of October 2017 indicates a modern structure potentially incorporating recent regulatory and methodological improvements.

Considerations

The expense ratio is 0.08%, which is higher than SPHY's 0.05%, increasing annual costs for investors.
Like SPHY, top holdings and sector weights data are not available, reducing portfolio transparency for potential investors.
A shorter operational history since 2017 means less long-term performance data is available compared to more established funds.

About SPHY and USHY

SPHY (SPHY)

The SPDR Portfolio High Yield Bond ETF (SPHY) is an exchange-traded fund designed to provide broad exposure to US high yield bonds. With a low expense ratio of 0.05%, it offers investors access to a diversified portfolio containing over 1,900 holdings. The fund currently boasts a dividend yield of 7.26%, reflecting the income potential of high yield markets. Net assets stand at approximately USD 11.98 billion, highlighting significant market participation. Since its inception in 2012, SPHY has tracked the performance of the US high yield bond sector, making it a potentially valuable tool for those seeking income diversification. However, investors should note that bond values fluctuate, and high yield bonds carry greater credit risk than investment-grade alternatives. As with all investments, past performance does not guarantee future results.

USHY (USHY)

The iShares Broad USD High Yield Corporate Bond ETF (USHY) offers investors exposure to a wide range of US dollar-denominated high yield corporate bonds. With a low expense ratio of 0.08%, this fund aims to provide income through bonds issued by companies considered to have lower credit ratings than investment-grade issuers. Holding approximately 1,900 securities, USHY provides significant diversification across various sectors of the corporate bond market. It has a notable dividend yield of 6.99%, making it potentially attractive for income-focused strategies. However, it's crucial to remember that investments in high yield bonds come with higher risks, including credit and interest rate fluctuations. As with all investments, there is no guarantee of performance, and the value of your investment can go down as well as up. This fund launched on October 25, 2017, and manages substantial assets, reflecting its role within the fixed-income ETF landscape.

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SPHY vs USHY

Fund Snapshot

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Investment Analysis

SPHY

Pros

Considerations

USHY

Pros

Considerations

About SPHY and USHY

Buy SPHY or USHY in Nemo

Zero Commission

Trusted & Regulated

6% Interest on Cash

Frequently asked questions

What is an ETF and why do expense ratios matter?

What is dividend yield?

What does 'high yield' mean in bonds?

What is the difference between the expense ratios?

How do these funds handle dividend payments?

Are these funds' portfolio holdings transparent?

Which fund is better for income investors?

What do these funds track?

How big are these funds?

Do the funds have similar histories?

What should I know about this comparison?

Fund Snapshot

About SPHY and USHY

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