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iShares U.S. High Yield Bond Index ETF (CAD-Hedged) (XHY)
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iShares Interest Rate Hedged High Yield Bond ETF (HYGH)
Q: HI;
Would you be kind enough to explain the differences and similarities between these two? Is xhy the canadian version of hyg? Is it hedged?
Is there wh tax on xhy. Level 1 or 2? Can I avoid the wh tax by buying hyg? Is hyg a us or canadian listed etf? Is hyg hedged?
Thanks, BEN.
Would you be kind enough to explain the differences and similarities between these two? Is xhy the canadian version of hyg? Is it hedged?
Is there wh tax on xhy. Level 1 or 2? Can I avoid the wh tax by buying hyg? Is hyg a us or canadian listed etf? Is hyg hedged?
Thanks, BEN.
5i Research Answer:
XHY is a US high yield bond ETF, trading in C$ on the TSX, tracking the Markit iBoxx USD Liquid High Yield Index. Assets are $414M, fees 0.56%, indicated yield 5.87%, one year return 6.80%, duration 3.6 years. HYGH is an interest rate hedged high yield bond ETF, not tracking a specific index (i.e. actively managed), trading in US$ on NYSE Arca, assets $176M, fees 0.51%, indicated yield 10.76%, one year return 10.15%. Since it is hedged, it has held up better as interest rates rose. But in a falling rate environment XHY could potentially gain more. There is no withholding tax on fixed income US investments if held in a Canadian ETF, so none on XHY.