Global negative-yielding bonds spike from $1 trillion in 2014 to nearly $12 trillion in September

With a sluggish global economy and heightened volatility in the financial markets, investors are searching out for bonds, even if they’re losing money throughout their maturity. In fact, it seems negative-yielding sovereign and corporate debt have never been this popular.

Reportedly, the total face value of subzero-yielding corporate and sovereign debt in the Bloomberg Barclays Global Aggregate Index of investment-grade bonds spiked to $11.6 trillion last month. This is up 6.1 percent from August.

This also reverses the two-month trend, when negative-yielding bonds dipped from its $11.9 trillion peak in June.

Investors’ demand for bonds went up in 11 of the 13 nations that have a minimum of $100 billion in negative-yielding debt. Italy and Denmark were the two excluded countries, which saw their total negative-yielding debt shrink to $361 million and $104 million, respectively.

Meanwhile, Japan accounts for roughly half of the global total of negative-yielding debt with close to $6 trillion. Western Europe, thanks to the likes of France, Germany, Spain and the Netherlands, represented 47 percent.

Approximately 10 percent of the world’s negative-yielding debt is owed by businesses.

Bloomberg has the rest:

“Sovereign and corporate debt totals include both new negative-yielding issues and bonds with prices that rose enough to push their yields into the money-losing zone. The Bloomberg Barclays Global Aggregate Index has a market capitalization of $48 trillion and includes investment-grade debt from 24 developed- and emerging-economy markets.

“The benchmark gauge does not include maturities of less than a year, which tend to have lower yields, so the value of many short-term less-than-zero bonds aren’t counted in this story. Because the totals are based on as-issued amounts, they also don’t take into account a small amount of buybacks.”

What is staggering is the fact that international negative-yielding debt stood at just around $1 trillion in September 2014.

Here is a timeline of the spike in global negative-yielding debt:

Next year should be a very interesting one.