Moscow, February 4 – “News.Economy.” On the background of panic sales in recent days, investors worldwide are buying the most reliable securities, including bonds with negative yields. Why this approach can be dangerous?
BlackRock Inc. reminds investors that bonds with negative yields are potentially a powder keg, while just a few days investing in them has grown by $2.7 trillion, according to Bloomberg.
concerns about the economic consequences of the epidemic of the coronavirus and bet on dovish policy of Central banks has led to higher prices of securities that promise a guaranteed loss of $13.9 trillion investors of the debt market with the strategy “buy and hold”.
the investors actively invested in new issues of bonds, including Greece and Austria.
In conditions of stabilization of economic indicators frenetic rally market debt looks unsustainable and dangerous.
“Before these assets is an enormous task to bring positive impact in 2020”, – wrote in his blog Director of BlackRock’s investment on the markets of fixed income Rick Rieder.
He expects negative returns in the segment of securities with interest rates below zero, since the measures of fiscal and monetary policy contribute to the acceleration of inflation and economic growth.
Caution BlackRock echoes the forecast of strategists at HSBC Holdings Plc, which closed the “buy” recommendation 15-year bonds of Germany, preferring paper France, less obvious defensive asset.
Aberdeen Manager Standard Investments Luke Himor also gives a bearish recommendation on the bonds.
Other investment company in a panic buying up bonds. Just last week, the market volume of debt with a negative yield increased to the maximum value since the beginning of the regular data collection by Bloomberg three years ago.
In January, after four months of losses German securities contributed 2%, according to data from Bank of America. Text: News.Economy