Since 1983, High Yield Has Produced +90% of the Return of Equities with Roughly Half the Risk

High Yield Has Produced +90% of the Return of Equities with Roughly One-Half the Risk

Return & Volatility of High-Yield Bonds & Stocks

Sources: Strategic Insight, as of December 31, 2012. Data from June 1983 through December 2012. Past performance is historical and does not guarantee future results. High Yield is represented by the Barclays Capital US High Yield Credit Index; Stocks are represented by the S&P 500 Index.

High Income
Relative to traditional fixed income sectors, high yield bonds offer substantially higher income.

While these bonds generally have lower credit ratings, they're also LESS sensitive to changes in interest rates. 

This means their price is LESS likely to decline when interest rates and inflation rise, two environments in which traditional fixed income sectors suffer.

This makes the high-yield sector an exceptional hedge and an uncorrelated diversifier for your portfolio.



Best of Both Worlds
High yield securities combine the best characteristics of stocks and bonds.

In fact, high yield bonds have historically generated long-term total returns similar to equities with almost half the volatility.

When compared to traditional fixed income sectors, high yield bonds have provided greater returns, albeit with additional volatility.

This distinct risk/return dynamic makes for a compelling, strategic long-term allocation.