Yield search isn’t a new theme. It’s actually been around for a couple of years. But with a growing number of bond yielding zero or less, due to the « globalization » of ZIRP, the chase for yield is intensifying.
Here’s the stock of bond yielding below 0, that is that investors have to pay for to own… Japan is a clear leader, but we now see Germany, France, the Netherlands joining the club. While Japan is above 2tn€, the Eurozone is close to 1.4tn€…
As Merrill puts it in a note today: « Perhaps the bigger story of 2015 though isn’t the
growth of negative yielding bonds, but the shrinkage in positive yielding government debt. »
The « thirst » for yield has already benefited some themes (real estate to name one) but more broadly, according to Merrill, all « safe » dividend sectors (staples, insurance, health care » could benefit.
The bank list some names: