AAA Yields at Zero Drive Investors to Belgian Debt: Euro Credit

Investors are relinquishing the sanctuary of AAA bonds as yields near or below zero on German, Dutch and Finnish debt drive them to seek higher returns on Belgian and French securities.

“Investors may seek security, but not at all costs,” said Johannes Jooste, a senior strategist at Merrill Lynch Wealth Management in London, which oversees $1.8 trillion globally. “Longer-term investors are looking at yields and thinking what possible gain is there in essentially paying some governments to look after their cash. The default risk in some countries like France, Belgium and Austria must be fractionally different from Germany if you take a long-term view.”