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Revisiting Investment-Grade Corporate Bonds for Your Clients

October 30, 2026

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

Line chart showing Bloomberg US Intermediate Corporate Index rising to 5.6%

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
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1 Schwab Center for Financial Research®, “Why Do Corporate Bonds Look Attractive Now," published 10/14/26; accessed 10/21/26: https://www.schwab.com/learn/story/why-do-corporate-bonds-look-attractive-now.

Bloomberg US Intermediate Corporate Index—The index measures the investment-grade, fixed-rate, taxable corporate bond market whose maturity ranges between 1 to 9.9999 years. It includes USD denominated securities publicly issued by US and non-US industrial, utility and financial issuers.

Yield to worst—A measure of the lowest possible yield that can be received on a bond that fully operates within the terms of its contract without defaulting. It is a type of yield that is referenced when a bond has provisions that would allow the issuer to close it out before its scheduled maturity.

Sources: Schwab Center for Financial Research®; Bloomberg. Weekly data from 10/23/11 to 10/23/26. Indexes are unmanaged, do not incur management fees, costs, and expenses and cannot be invested in directly. For additional information about the indices and terms shown, please visit www.schwabassetmanagement.com/resources/glossary.

Past performance is no guarantee of future results.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. 

All expressions of opinion are subject to change without notice in reaction to shifting market, economic or political conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Investing involves risk, including loss of principal. Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors.

Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). Bloomberg or Bloomberg’s licensors own all proprietary rights in the Bloomberg Indices. Neither Bloomberg nor Bloomberg’s licensors approve or endorse this material, or guarantee the accuracy or completeness of any information herein, or make any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

The Schwab Center for Financial Research® is a division of Charles Schwab & Co., Inc.

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