Morgan Stanley Explains Why Institutions Invest In Negative Yielding Bonds

In a report “Making Sense of Negative Yields,” a Morgan Stanley report explains why institutional investors in Europe are purchasing bonds that pay the corporation rather than the investor AKA Negative Yielding Bonds. “With valuations as distorted as they are, investors are left with very small margins for error,” the September 12 report warned. The report "plunge(d) further down the rabbit hole and explore(d) this new upside-down world of European corporate credit.”

Negative Yielding Bonds - Institutional investors driven by mandate, price momentum and benchmarks to invest

With an estimated €467 billion bonds across Europe now in negative yields – a diverse basket across issuers, maturities and credit ratings – are negative for...