If your clients are worried about the outlook for interest rates but need more fixed income, consider investment-grade corporate bonds.

Key takeaways:

• The average yield to worst on intermediate-term investment-grade corporate bonds was recently around 5.6%. This represents the higher end of its range over the past 15 years, as this chart illustrates.
• When starting yields are high, a bond’s income may help to offset any price declines caused by rising rates, potentially propping up a bond’s total return prospects.
• Past performance doesn’t guarantee future results, but it may provide directional insights. Historically, when yields have been high, average returns have often been higher, and the range of returns narrower. So, today’s higher yields may generally mean better returns over time.¹