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Monday, December 1, 2008

High Yield: On Pace for the Worst Year on Record

I've seen a lot of charts showing the relative demise of the equity market as compared to past busts (a great one here from Doug Short via The Big Picture).

How have high yield bonds performed? Well, data doesn't go too far back (~25 years), but in a year in which Treasuries have rallied... and rallied hard (i.e. the duration component has had strong returns), the high-yield index has recorded its worst year on record by about 3x that of the previous worst year (1990) and is now down more than 30% YTD through November.

Source: Barclays