The longer-run average S&P 500 return is nearer 9 percent, but during the past decade it has exceeded 14 percent. U.S. bonds have also rallied, returning around 2 percent. Yields across most developed countries have fallen to record lows, with the 10-year obligations of Germany, Japan, and Switzerland (among others) offering a negative nominal yield to maturity. 

Despite their lower long-run return, the great advantage of bonds and other fixed-income securities, relative to equities, is that they pay, assuming there is no default, regular interest in the form of coupons. For pension funds and other institutions, which need to maintain a steady stream of payments to their plan beneficiaries, these coupons allow the cash flows from assets to match liabilities. Equities, by contrast, may or may not pay dividends (which, in any case, are often variable), and that uncertainty is compounded by the tendency of equity markets to rise and fall, at times dramatically.