Distribution of Returns: Bonds vs Stocks
High Yield Bonds in their worst percentile has a median return of -55% and the best returning percentile has a return of 54%, But whats really interesting is that the bond line does not go negative until the 10th percentile. Credit is incredibly predictable but you shouldn’t be expecting a huge upside (only 54% in 1% of the case). If you are going into credit and saying I want to make equity like returns, its probably not going to happen. But if you go into credit and say I want to make a decent return without the equity downside, there is a very good chance of being able to do that.
Another interesting data on yields vs credit ratings
