M&G: The brave new world of zero yield corporate debt

Anna Fedorova
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Investors may soon be entering a brave new world of zero yield corporate bonds, according to M&G fixed income manager James Tomlins.

His comments come as the move by the European Central Bank (ECB) to further drive down borrowing costs across the continent is already having unprecedented effects on the bond market. Just a few days ago, Nestlé's Euro 2016 corporate bond traded at a yield of negative 0.002%, bringing the markets one step closer to the "zero yield corporate bond" reality. Though a bond with no yield does not look attractive based on traditional investment parameters, in a world at risk of deflation it would still amount to a positive real return, Tomlins (pictured) points out. "The market is essent...

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