High Yield Bonds: Historical Performance Data

Year-by-Year Total Returns, 1980-2013

Businessman using phone in office
David De Lossy / Getty Images

For an asset class with so much money invested in it, it’s extremely challenging to find the year-by-year returns for the high yield bond market. For those interested in seeing how high yield has performed over time, the table below shows the return for the category each year since 1980, along with its performance relative to stocks (as gauged by the S&P 500 Index) and investment grade bonds (as measured by the Barclays Aggregate Bond Index).

High yield returns are represented by the Salomon Smith Barney High Yield Composite Index from 1980 through 2002, and the Credit Suisse High Yield Index from 2003 onward.

YearHY Bonds Investment-Grade  Stocks
 1980  -1.00%  2.71%  32.50%
 1981  7.56%  6.26%  -4.92%
 1982  32.45%  32.65%  21.55%
 1983  21.80%  8.19%  22.56%
 1984  8.50%  15.15%  6.27%
 1985  26.08%  22.13%  31.73%
 1986  16.50%  15.30%  18.67%
 1987  4.57%  2.75%  5.25%
 1988  15.25%  7.89%  16.61%
 1989  1.98  14.53%  31.69%
 1990  -8.46%  8.96%  -3.11%
 1991  43.23%  16.00%  30.47%
 1992  18.29%  7.40%  7.62%
 1993  18.33%  9.75%  10.08%
 1994  -2.55%  -2.92%  1.32%
 1995  22.40%  18.46%  37.58%
 1996  11.24%  3.64%  22.96%
 1997  14.27%  9.64%  33.36%
 1998  4.04%  8.70%  28.58%
 1999  1.73%  -0.82%  21.04%
 2000  -5.68%  11.63%  -9.11%
 2001  5.44%  8.43%  -11.89%
 2002  -1.53%  10.26%  -22.10%
 2003  27.94%  4.10%  28.68%
 2004  11.95%  4.34%  10.88%
 2005  2.26%  2.43%  4.91%
 2006  11.92%  4.33%  15.79%
 2007  2.65%  6.97%  5.49%
 2008  -26.17%  5.24%  -37.00%
 2009  54.22%  5.93%  26.46%
 2010  14.42%  6.54%  15.06%
 2011  5.47%  7.84%  2.11%
 2012  14.72%  4.22%  16.00%
 2013  7.53%  -2.02%  32.39%


When looking at these returns, it’s important to keep a few historical factors in perspective.

First, in the early days of the high yield market there was a much higher representation of  “fallen angels” – or former investment-grade issues that fell into below-investment grade territory – than there is today, and a corresponding lower representation of issues from the type of smaller companies that make up the bulk of the market now.

Second, it's important to note that all of the down years for high yield were accompanied by economic slowdowns (1980, 1990, 1994, 2000) or financial crises (2002, 2008).

Third, yields were much higher in the past than they are today. While absolute yields have spent much of 2012-2013 period below 7.5% - and reached as low as the 5.2% - 5.4% range in April-May 2013, these levels would have been unheard of in prior years. The 1980-1990 period generally saw yields in the mid-teens, and even at the lows of the late 1990s, high-yield bonds still yielded 8-9%. During the 2004-2007 interval, at which point yields hovered near the 7.5%-8% level (record lows at the time), high yield bonds also paid a much higher yield than they do now.

The takeaway is twofold: 1), high yields bonds had higher return potential due to the larger contribution from yield to total return and 2) there was more room for price appreciation. (Keep in mind, prices and yields move in opposite directions).

As a result, those who invest in the asset class today shouldn’t expect a repeat of the type of returns shown above. Still, these numbers show that over time high-yield bonds have delivered very competitive returns

Learn More About High Yield Bonds:

The Basics of High Yield Bonds

The Risks of High Yield Bonds

Using High Yield Bonds for Diversification

High Yield Bonds: A Hedge Against Rising Rates

What are Fallen Angels?

Should You Buy a Short-Term High Yield Bond Fund?