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Funds Face Trillion-Dollar Hit on Negative-Yielding Debt Pile

  • Holders losing purchasing power, says BNY Mellon’s Tenengauzer
  • Global stock of sub-zero yielding debt stands at $13 trillion
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Adopting a Low (Yielding) Profile
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The slide of so many bond yields below zero may cost pension funds and other institutional investors a trillion dollars this year.

Investors could lose $864 billion on debt with negative yields over the next 12 months, according to Daniel Tenengauzer, head of markets strategy at Bank of New York Mellon Corp. He predicts bond holders could separately shed another $176 billion in lost purchasing power through the securities, which would guarantee a loss if held to maturity.