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Income Volatility Fixed Income Chart

The One Metric All High-Yield Investors Should Know

2022年4月21日
2 min read
Five-Year Returns Have Closely Tracked Yield at Start of Period
Five-Year Returns Have Closely Tracked Yield at Start of Period

Historical and current analysis and forecasts do not guarantee future results. An investor cannot invest directly in an index, and its performance does not reflect any fees and expenses or represent the performance of any AB fund.
As of April 19, 2022
*Yield to worst as of date shown
†Annualized five-year return beginning on date shown
Source: Bloomberg and AllianceBernstein (AB)

High-yield bonds have a reputation for volatility. But history shows that the US high-yield sector’s yield to worst has been a reliable indicator of its return over the following five years.

In fact, US high-yield bonds have performed predictably, even through rough markets. The relationship between yield to worst and future five-year returns held steady during the global financial crisis, one of the most stressful periods of economic and market turmoil on record.

Why? High-yield bonds supply a consistent income stream that few other assets can match. And when high-yield issuers call their bonds before they mature, they pay bondholders a premium for the privilege. This helps compensate investors for losses suffered when some bonds default.

What does all this mean for today’s investors? High-yield bonds may experience some near-term volatility, but investors with a long-term lens can ride out short-term drawdowns.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams. Views are subject to revision over time.

Investment involves risk. The information contained here reflects the views of AllianceBernstein L.P. or its affiliates and sources it believes are reliable as of the date of this publication. AllianceBernstein L.P. makes no representations or warranties concerning the accuracy of any data. There is no guarantee that any projection, forecast or opinion in this material will be realized. Past performance does not guarantee future results. The views expressed here may change at any time after the date of this publication. This article is for informational purposes only and does not constitute investment advice. AllianceBernstein L.P. does not provide tax, legal or accounting advice. It does not take an investor's personal investment objectives or financial situation into account; investors should discuss their individual circumstances with appropriate professionals before making any decisions. This information should not be construed as sales or marketing material or an offer of solicitation for the purchase or sale of, any financial instrument, product or service sponsored by AllianceBernstein or its affiliates. This presentation is issued by AllianceBernstein Hong Kong Limited (聯博香港有限公司) and has not been reviewed by the Securities and Futures Commission.

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