Financial FitnessGeneral Information

What’s a Negative Yielding Bond?

By December 26, 2019 No Comments

Some of the talk in the media is around the Federal reserve cutting interest rates.  According to Bloomberg, there are 13 trillion dollars’ worth of negative yielding bonds in the world today.

In other words, an investor who buys a government bond and holds that bond until maturity would actually receive less money back over the bond’s lifetime. Including the annual interest and what they initially paid for the bond.

$6 trillion of the $13 trillion negative yielding bonds is Japanese sovereign debt and it’s important to note than none of the $13 trillion is US government debt.

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  All performance referenced is historical and is no guarantee of future results.  All indices are unmanaged and may not be invested into directly. 

https://www.bloomberg.com/news/articles/2019-06-21/the-world-now-has-13-trillion-of-debt-with-below-zero-yields