US-listed · NYSE Arca · FIF-eligible (above NZ$50K)
iShares HYG iShares iBoxx $ High Yield Corporate Bond ETF
Tracks the Markit iBoxx US Liquid High Yield Index — below-investment-grade US corporate bonds with monthly distributions.
Updated Reviewed quarterly
HYG holds below-investment-grade ("junk") corporate bonds. Default rates rise sharply in recessions (historical peaks 5-10% per annum); the ETF price typically falls 20-30% in credit-stress events. The 7.0% yield reflects credit-spread compensation, not a free lunch — read iShares' prospectus and the credit-cycle risk disclosure before investing.
About this fund
What is HYG?
HYG is the US-listed ticker for iShares iBoxx $ High Yield Corporate Bond ETF, issued by iShares. Tracks the Markit iBoxx US Liquid High Yield Index — below-investment-grade US corporate bonds with monthly distributions. TER is 0.49% per year, with a trailing 12-month distribution yield of approximately 7.0%. Distributions are paid monthly.
How to buy
Where can I buy HYG from New Zealand?
Hatch NZ-built. US$3 flat per trade, ~0.5% FX.
Stake Commission-free US shares; ~0.7% FX.
Sharesies NZ + AU + US in one account; tiered subscription pricing.
Interactive Brokers Tiered commissions; FX margin ~0.002% (lowest published of platforms reviewed).
See the full platform comparison for fees, minimums, and supported markets across all 11 NZ-accessible brokers.
NZ tax
How is HYG taxed for NZ investors?
HYG is US-listed, so it sits in the Foreign Investment Fund (FIF) regime once your overseas-share holdings exceed NZ$50,000 cost basis. Below that threshold, the FIF regime does not apply and you pay tax on dividends only.
Above NZ$50K cost basis, most NZ retail investors use the Fair Dividend Rate (FDR) method — deemed income = 5% × opening market value × your marginal tax rate. FDR vs CV method →
US dividends carry 15% US withholding tax under the NZ–US tax treaty (file a W-8BEN with your broker; without it, the rate is 30%). The 15% can be claimed as a foreign tax credit on your IR3.
Tax outcomes depend on your portfolio size, marginal rate, and FDR-vs-CV election. See PIE vs FIF for the full comparison and consult a registered NZ tax adviser for personalised guidance.
FAQ
Common questions about HYG
What is the HYG ETF? ⌄
HYG is the iShares iBoxx US Liquid High Yield Corporate Bond ETF — it tracks the Markit iBoxx US Liquid High Yield Index, holding below-investment-grade ("junk") US corporate bonds. TER is 0.49%, distributions paid monthly. The fund holds ~1,200 issues and is one of the most liquid junk-bond ETFs.
Why does HYG pay such a high yield? ⌄
Junk bonds (rated BB or lower) compensate investors for higher default risk than investment-grade corporate bonds. HYG's ~7.0% trailing yield reflects credit-spread compensation. In recessions, junk-bond default rates rise sharply (5-10% historically), and the ETF price typically falls 20-30%. The high yield is not free — it is risk premium.
HYG vs JNK — what's the difference? ⌄
Both track US high-yield corporate bonds. HYG (iShares) tracks the iBoxx index; JNK (SPDR) tracks the Bloomberg index. Holdings overlap heavily; performance is typically within 0.1-0.3% of each other. HYG has higher trading volume and tighter bid-ask spreads. For NZ buy-and-hold investors the choice is mostly cosmetic.
How is HYG taxed for NZ residents? ⌄
Above NZ$50,000 cost basis, FIF rules apply (FDR method most common — 5% × opening MV × marginal rate). Bond distributions are interest income; depending on your broker's tax-statement classification this may be taxed differently from equity dividends. The 15% US withholding treaty rate may not apply to corporate bond interest — confirm with your broker's annual statement.
Related ETFs and resources
SCHZ — Schwab Intermediate Treasury ETF
Investment-grade alternative; lower yield, lower credit risk.
BKLN — Invesco Senior Loan ETF
Floating-rate senior loans; ranks above junk bonds in capital structure.
JEPI — JPMorgan Equity Premium Income
Equity-income alternative for high-yield seekers.
FIF tax explained
When FIF applies and how to file.
Compare NZ platforms
Hatch, Sharesies, Stake, Interactive Brokers — fee comparison.