One of my favourite publications of the month comes from JP Morgan and has the catchy title of “Negative Yield Index Monitor” – I know, I should get out more.

This publication provides a snapshot of the weird and wonderful world of global bonds and the prevalence of negative yielding bonds. The current outstanding market value of negative yielding government debt stands at $10.1trn – that is even more than a pocketful of Bitcoins, but watch this space.

This will be the highest year-end total of negative yielding bonds on record, compared to $9trn at the end of 2016 and $6trn at end 2015. So in a year when global central banks have reduced the degree of support they provide, the Federal Reserve and Bank of England have raised interest rates and the European Central Bank and Bank of Japan have reduced the scale of their easing, the amount of negative yielding bonds has actually risen.

This is a key reason why we believe active management of fixed income portfolios is key at this point in the cycle. A passive allocation could leave you a prisoner to the growing drag of negative yielding bonds.

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