High yield corporate bonds are speculative-grade securities (a much higher level of credit risk) that tend to pay a higher rate of interest than their investment-grade counterparts. 

One of the primary indicators used for assessing risk levels in the high yield corporate bond market is the industry default rate. A bond default occurs when the issuer fails to make an interest or principal payment within the specified period.

The long-term global speculative-grade default rate, as tracked by Moody's, has averaged approximately 4.3%, according to its own release. In July 2017, the default rate stood at 3.1%. 

Moody's believes that the default rate will be lower a year from now. It is forecasting a default rate of 2.2% by July 2018. 

As indicated in the chart, asset levels in high yield corporate bond funds relative to total taxable bond fund assets dropped dramatically during the 2008-2009 financial crisis. With the exception of 2013, these asset levels have remained below the average from 2000-2016 (see chart). 

What makes 2013 interesting is that interest rates rose markedly that year. The yield on the benchmark 10-year Treasury note increased 127 basis points, from 1.76% to 3.03%, according to Bloomberg.  

From 2000-2016, total high yield corporate bond issuance as a percentage of total corporate bond issuance averaged 17.00% (not shown in chart), according to data from SIFMA. 

From 12/31/99-12/30/16, a period that included a number of challenges and shocks to the economy, the BofA Merrill Lynch U.S. High Yield Constrained Index posted an average annual total return of 7.20%, according to Bloomberg. For comparative purposes, the S&P 500 Index posted an average annual total return of 4.51% over the same period.