High Yield

The Comeback Kid

12 February 2019

1 min read

To Understand Today’s High-Yield Market, Look to Past Drawdowns and Recoveries*

Through December 31, 2018; US high yield is represented by the Bloomberg Barclays US High Yield Index.
Past performance is not a guarantee of future results. Individuals cannot invest in an index.
*Recovery is defined as a return to the level of the prior peak
Source: Bloomberg Barclays and AllianceBernstein (AB)

The US high-yield market has suffered ten peak-to-trough losses greater than 5% in the last 20 years. On average, investors recovered their losses in only four months—and sometimes as few as two. Following the longest and largest drawdown of –35%, which lasted 19 months, investors who stayed in the high-yield market earned back 55% in just eight months.

And that’s not all: The price of the high-yield market has historically continued to rise following recovery. While we anticipate more bumps in the high-yield road in 2019, high-income investors currently on the sidelines might want to weigh the opportunity cost of staying out altogether.

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.

This is a marketing communication. This information is provided by AllianceBernstein Limited, 60 London Wall, London, EC2M 5SJ. Registered in England, No. 2551144. AllianceBernstein Limited is authorised and regulated in the UK by the Financial Conduct Authority (FCA - Reference Number 147956). It is provided for informational purposes only and does not constitute investment advice or an invitation to purchase any security or other investment. The views and opinions expressed are based on our internal forecasts and should not be relied upon as an indication of future market performance. The value of investments in any of the Funds can go down as well as up and investors may not get back the full amount invested. Past performance does not guarantee future results. This information is directed at Professional Clients only and is not intended for public use.