May

4

DoubleLine Capital's Jeffrey Gundlach said he's considering making an amplified bet against German bonds to join a growing group of top money managers wagering against the debt after some yields turned negative…

Since September last year, the pool of European bonds that essentially charge investors to own them has almost tripled to 2.8 trillion euros ($3.1 trillion) from 1 trillion euros, according to Bank of America Corp. data. The increase has been driven by central banks buying bonds to stimulate economies and has sent yields on German two-year notes to minus 0.273 percent, according to data compiled by Bloomberg.

When you short negative yielding bonds you have a positive carry.

If German 2s yield -0.20%, shorting them produces a positive carry, which when amplified by 100 equals a 20% return.


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