High Yield Market Statistics
0.94%
Average Default Loss Rate
European High Yield Market (Bloomberg)
30 Dec 2018 to 28 Dec 2022
Source:
Bloomberg and Credit Suisse
.
Past performance is not a reliable indicator of future performance.
Historical Returns of UK Equities and High Yield bonds
This chart plots the returns of key indices used by the industry to assess the performance of equities, investment grade corporate bonds, and high yield corporate bonds.
High yield corporate bonds have outperformed UK equities and investment grade bonds over the last 20 years both in terms of returns and price volatility.
Learn moreSource: Bloomberg and ICE Data Services. Data as of 28 Dec 2022.
European High Yield Corporate Bond Market
The European High Yield Corporate Bond Market is a large, well established, asset class which continues to develop with the market value of outstanding bonds growing from €112 billion in 2009 to €396 billion in 2022.
Source: Credit Suisse. Data as of Dec 2022
Historical Default and Default Loss Rates
The 12 Months Default Rate measures the proportion of companies that failed to repay their bonds in the last 12 months. The lower the rate the better. Between July 2015 and December 2022 it has been as low as 0% (i.e. no defaults over the last 12 months), and as high as 1.5%, with a mean of 0.76% & median of 0.8%.
Many bonds are secured, meaning they are backed by assets, which, in the event of default, can be sold to recover funds for bondholders.
The 12 Months Default Loss Rate measures the amount lost after the sale of assets to recover funds for bondholders. Between July 2015 and Dec 2022 corporate bondholders lost between 0% and 3.4% due to defaults, with a mean of 0.94%, and a median of 0.61%
Learn moreSource: Credit Suisse. Data as of Apr 2023
UK Pension Fund Asset Allocation 2022
With strong historical returns and low default loss rates, bonds have become increasingly sought-after among pension funds.
In 2022 UK Pension Funds allocated 56% of their portfolios to bonds, topping equities at 33% to make bonds their favorite asset class.
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