The chart shows the breakdown of the global fixed income market by a few groupings of yields. In 2000 and 2007, over 75 percent of the fixed income market yielded 3+ percent and 25 percent yielded 0 to 3 percent. But everything changed after the 2008 financial crisis.
As central banks experimented with unorthodox policies (ZIRP, QE, negative rates), yields became scarce. By 2010, 3+ percent yields made up only 25 of fixed income investments. While there were tiny outcroppings of negative yield from 2010 to 2015, 75 percent of the market was made up of “0 to 3 percent” yields.
The real change happened about 5 years ago as commodity prices crashed, renewing deflationary concerns. Negative yielding bonds surged to nearly a quarter of the global fixed income market. There are still $12.3 trillion bonds with sub-zero yields out of $70 trillion in government bonds globally.
Source: Algebris Investments