Summary
Bond yields in developed markets like the US, UK, Germany and Japan are less than 1% or even negative
To earn meaningful yields, investors now need to venture into emerging markets
Some markets like Turkey or Brazil carry significant currency risk, but others like China or India less so
It seems like an age ago, but US government bonds yielded close to 2% last year. Today they yield a paltry 0.8%. The US, then, joins many other developed markets with less than 1% yield on their government bonds. Italy offers only 0.8%, the UK 0.3%, Spain 0.2% and Japan 0% (Chart 1). Meanwhile, both France and Germany offer negative yields – you get back less than you put in. So where can an investor get some yield?
Bond yields in developed markets like the US, UK, Germany and Japan are less than 1% or even negative
To earn meaningful yields, investors now need to venture into emerging markets
Some markets like Turkey or Brazil carry significant currency risk, but others like China or India less so
It seems like an age ago, but US government bonds yielded close to 2% last year. Today they yield a paltry 0.8%. The US, then, joins many other developed markets with less than 1% yield on their government bonds. Italy offers only 0.8%, the UK 0.3%, Spain 0.2% and Japan 0% (Chart 1). Meanwhile, both France and Germany offer negative yields – you get back less than you put in. So where can an investor get some yield?
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