smoking isn’t good for your health but bonds issued by riskier food beverage and tobacco companies consistently have been top performers when times get tough that’s a key takeaway from a new report examining which parts of the us highyield hyg  or “junkbond jnk  ” market have held up best when economic recessions hit in the past two decades “the ‘r word’ has been bandied about more frequently since the 2to10 yield curve inversion on april 1 wrote martin fridson chief investment officer of lehmann livian fridson advisors in a tuesday report for sp global market intelligence for investors concerned about the next recession fridson dug into total returns for the 20 biggest industries in the ice bofa high yield index see chart for the top performers in the past three recessions segments that consistently ranked high were healthcare and utilities in addition to food beverage and tobacco see “all” category when looking 12months before the official start of the 2001 20082009 and 2020 recessions through their aftermath of note fridson excluded the 12months before the 2020 recession due to “the unforeseen onset of covid19” that triggered the brief twomonth economic downturn within those parameters several industries had “highly inconsistent relative performance” including telecommunications the no 1 performer during the 200809 recession but the worst at no 20 in the 2001 downturn retail also showed historically spotty performance but it was automotive and auto parts diversified financial services and leisure that were consistently the worst performers in downturns according to the report while the timing of the next recession remains a topic of debate investors have been focused on its likelihood as the federal reserve has shifted its focus to aggressively tighten financial conditions to cool inflation at 40year highs but without derailing the economy highyield bonds often have been considered a proxy for stocks in terms of the sp 500 index’s spx sector performance the big winners in a rough start to 2022 have been energy sp5001010 up 45 utilities sp50055 climbing 62 and consumer staples sp50030 advancing 27 on the year through tuesday according to factset but mostly stocks and bonds have been in the red this year in part as treasury yields tmubmusd10y have pushed dramatically higher in anticipation of a series of potentially large increases to the fed’s policy interest rate in the coming months the investmentgrade us corporate bond market already has experienced the worst patch of performance since the collapse of lehman brothers where yields now top 4 versus about 64 in highyield see full extent of fed’s likely tightening not priced into markets imf official says