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BMO High Yield US Corporate Bond Hedged to CAD Index ETF (ZHY)
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iShares U.S. High Yield Bond Index ETF (CAD-Hedged) (XHY)
Q: These two US Corporate bond ETFs seem quite similar. How would you decide which of these two to buy in a registered account?
5i Research Answer:
Both are high-yield corporate bond ETFs hedged to CAD, however, XHY has a slightly lower MER at 0.56%, whereas ZHY has a 0.61% MER. ZHY has a higher AUM at $0.76B, whereas XHY has an AUM of $0.4B. Performance-wise, XHY has outperformed ZHY over the past 10 years, annualizing a total return of 2.2% vs. ZHY at 1.9%. Overall, given the lower MER and better returns, we would prefer XHY here.