Historical Performance Data of High-Yield Bonds

Year-by-Year Total Returns From 1987 Through 2021

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High-yield bonds are riskier, because the issuer is less likely to pay you the promised interest rate. To make up for that, they offer a higher interest rate than investment-grade bonds, which are rated better.

One way to evaluate whether it's worth investing in high-yield bonds is to look and see how the high-yield bond market has performed over time, as compared to market indexes like the S&P 500. When you look at the data, you'll want to consider a variety of factors, including how long you plan on holding onto the bonds, and how risky your current investment strategy is.

The table in this article shows the returns for the high-yield and investment-grade bonds indexes alongside the S&P 500 stock index, beginning in 1987.

Key Takeaways

  • Your total return on bonds depends on whether or not the issuer defaults on the bonds. That means that investment-grade bonds may sometimes net you a higher total return than high-yield bonds.
  • High-yield bonds often did particularly poorly during recessions or financial crises.
  • Since the late 1980s, the stock market has generally outperformed bonds.

Historical Performance Data of High-Yield Bonds

The data below reflects the total return. The data used for high-yield bonds was the Bank of America US High Yield Index, and the data used for investment-grade bonds is the Bank of America US Corporate Index. The S&P 500 data includes the dividend yield in the total return.

Year High Yield Bonds S&P 500 Investment Grade Bonds
1987 4.47%  5.81%  1.84%
1988 13.36%  16.54%  9.76%
1989 2.31%  31.48%  14.11%
1990 -4.36%  -3.06%  7.37%
1991  39.17%  30.23%  18.24%
1992  17.44%  7.49%  9.12%
1993  16.70%  9.97%  12.43%
1994  -1.04%  1.33%  -3.34%
1995  20.46%  37.20%  21.55%
1996 11.27%  22.68%  3.39%
1997  13.27%  33.10%  10.39%
1998  2.95%  28.34%  8.72%
1999  2.51%  20.89%  -1.89%
2000  -5.12%  -9.03%  9.13%
2001   4.48%  -11.85%  10.70%
2002  -1.89%  -21.97%  10.17%
2003  28.15%  28.36%  8.31%
2004  10.87%  10.74%  5.41%
2005  2.74%  4.83%  1.97%
2006  11.77%  15.61%  4.38%
2007  2.19%  5.48%  4.64%
2008  -26.39%  -36.55%  -6.82%
2009  57.51%  25.94%  19.76%
2010  15.19%  14.82%  9.52%
2011  4.38%  2.10%  7.51%
2012  15.58%  15.89%  10.37%
2013  7.42%  32.15%  -1.46%
2014  2.50%  13.52%  7.51%
2015  -4.64%  1.38%  -0.63%
2016  17.49%  11.77%  5.96%
2017  7.48%  21.61%  6.48%
2018  -2.27%  -4.23%  -2.25%
2019  14.41%  31.21%  14.23%
2020  6.17%  18.02% 9.81% 
2021 5.36% 28.47% 0.95%

It might seem strange that high-yield bonds would have a lower total return some years, but that's because the total return includes high-yield bonds that have defaulted. High-yield bonds are also high-risk bonds.

If you're considering investing in high-yield bonds, you'll need to keep in mind that the yield is promised, not guaranteed. High-yield bonds are typically issued by companies that are more likely to default.

Although high-yield bonds typically weather inflation better than investment-grade bonds, they are more vulnerable in economically tumultuous times, since the companies that issue them may not be able to handle recessions or economic downturns.


Many of the down years for high-yield bonds were accompanied by economic slowdowns, like in 1990, 1994, and 2000, or by financial crises in 2002 and 2008.

Diversify Your Portfolio

If you decide to invest in high-yield bonds, make sure they aren't the bulk of your investing strategy. You should have a variety of investments, including stocks and investment-grade bonds. That way, if one of your investments is more vulnerable, the rest of your portfolio can help mitigate any losses.

The Bottom Line

Clearly, there are situations in which high-yield bonds can be more profitable than investment-grade bonds. If you want to invest in a high-yield bond, you should do the necessary market research, which includes reviewing the risks of buying an individual bond, the company's financial condition, and the economy in general. You'll then want to determine if the risk of default is lower than the yield the company is offering,

Frequently Asked Questions

What happens to high yield bonds during inflation?

Interest rates tend to rise during inflationary periods. High-yield bonds tend to perform better than investment-grade bonds when interest rates rise, as long as defaults stay low. In addition, high-yield bonds often have shorter terms than investment-grade bonds. Bonds with shorter terms will usually suffer less from higher interest rates.

Why are high yield bonds falling?

When interest rates go up, high-yield and investment-grade bond prices tend to go down. When interest rates go down, bond prices tend to go up.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. NYU Stern. "Historical Returns on Stocks, Bonds and Bills: 1928-2021."

  2. Federal Reserve Bank of St. Louis. "ICE BofA US Corporate Index Total Return Index Value."

  3. Federal Reserve Bank of St. Louis. "High Yield Index Total Return Index Value."

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