The Rieger Report: S&P 500 Has Outperformed S&P 500 Bond Index 7 of last 9 Years

Blue chip stocks have seen dramatic twists and turns over the past 10 years creating opportunity and angst for investors.  The bonds of these same companies have been less volatile and perhaps a bit boring.  The result has been that the S&P 500 has outperformed the S&P 500 Bond Index 7 of the last 9 years.  A closer look at those returns over a 10 year period show they actually are quite close.

Annual Returns 500 & 500 Bond

Looking at the 10 year annualized returns of stocks and bonds of the blue chip companies in the S&P 500 Index have been similar:

  • The 10 year annualized returns of the S&P 500 Bond Index and the S&P 500 Index are only 147bps apart.
  • Annualized risk adjusted returns taking into account the volatility of each asset class show a annualized 50bp return difference for the 10 year period and a 3bp difference in the 5 year return.

Annualized 500 Bond v Equity

When looking at the annualized risk adjusted returns which take into account volatility in each asset class the returns of blue chip stocks and bonds are very close.

Annualized Risk Adjusted Returns:

500 Bond v Equity

 

 

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