Market Insider

Why big investors including BlackRock are buying negative-yielding debt

Mario Tama | Getty Images

As the pool of negative yielding debt grows, big-name investors including BlackRock have jumped in.

Sluggish global growth has made many countries' central banks adopt a loose monetary policy — stepping up bond purchases and cutting interest rates, even into negative territory. With historically low yields limiting investors' returns, money managers are in a tough situation: There are few investment opportunities in a world where bond yields are low and U.S. stocks are near all-time highs.

In such an environment, "we do buy some negative rate corporate bonds," Rick Rieder, BlackRock's chief investment officer and co-head of global fixed income, said at a media roundtable the company held on Wednesday.

And he provided an explanation:

"The only reason you buy negative-rate bonds is if you think it's going to go more negative," he said.