, Columnist
Europe’s Rescue Package Gives Bond Yields a Chance
A top-rated borrower offering a yield premium to Germany will find a warm welcome.
A new era dawns.
Photographer: Kenzo Tribouillard/AFP via Getty Images
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European bond buyers are currently trapped between the devilishly unpredictable mood swings of higher-coupon government debt such as Italy and Greece, and the deep blue sea of top-rated but sub-zero yielding German bunds. But salvation is on the horizon — both for fixed-income fund managers and our pensions.
Investors starved of yield are in for a treat in the coming years, as the European Union’s pandemic response creates a sizeable increase in one flavor of top-quality securities offering more bang for a buck than is available from lending to Germany.