The index measures the performance of investment-grade bonds in the United States and includes U.S Treasuries; government-related issues; corporate bonds; agency mortgage-backed pass-throughs; consumer asset-backed securities; and commercial mortgage-backed securities. In the middle column, the S&P 500 Index measures the performance of the 500 largest companies in the U.S. stock market. On the right is the difference in performance between the two. Find out more about how stocks and bonds stack up on a long-term basis.
Returns on Bloomberg US Aggregate Bond Index vs. S&P 500
The table below shows the return of the two indices on a year-by-year basis between 1980-2021. Information is gathered from multiple sources.
Years Positive: 38 of 42Highest Return: 32.65%, 1982Largest Decline: -2.92%, 1994Average Annual Gain (1980-2018): 7.41%
(Note: This is simply the average gain, not an average annualized total return.)
S&P 500 Statistics
The S&P 500’s performance:
Years Positive: 35 of 42Highest Return: 37.20%, 1995Largest Decline: -36.55%, 2008Average Annual Gain: 13.52%
Comparative Statistics
Some interesting statistics:
Years Bonds Outperformed: 11 of 42Years Stocks Outperformed: 31 of 42Bonds’ Largest Margin of Outperformance: 41.79%, 2008Bonds’ Largest Margin of Underperformance: -34.17%, 2013
A 50-50 Split
How would a 50-50 allocation of $1,000 invested in 1928 between the two indices have fared?
Years Positive: Bloomberg 37 of 42, S&P 500 34 of 42Highest Return: Bloomberg $1,461, S&P 500 $28,353Largest Decline: Bloomberg -$299, S&P 500 -$10,850Average Annual Gain: Bloomberg $581, S&P 500 $8,751
Figures From 1928-2021
The Federal Reserve Bank of St. Louis has measured the returns of stocks, Treasury bills, and 10-year Treasury bonds since 1928. Some interesting figures from 1928-2021 are:
Stocks averaged an annual return of 11.82% in the period from 1928-2021, while T-bills and T-bonds averaged 3.33% and 5.11%, respectively.$100 invested in stocks in 1928 would have grown to $761,710.83 by the end of 2021, while $100 in T-bills and T-bonds would have grown to $2,083.06 and $8,526.95, respectively.T-bills produced positive returns in all 94 calendar years, while T-bonds gained in 76 of the 94 years (81%) and stocks rose in 69 (73%).
The S&P 500 clearly posts higher annualized returns, but the extreme fluctuation during market swings can make it a turbulent investment in the short-term. Bonds tend to stay fairly stable but have much lower returns overall.
