There is a new talk in the town: Bonds that cost investors the money. In short, losing money deliberately. According to the latest Bloomberg report, the bonds with negative yields touched ~USD 13 trillion up from ~USD 8 trillion a year ago. But before we move ahead, we should take a look at what constitutes a negative yields bond. Reference: Link Say, a bond's face value is $400 and the coupon rate is 2.5%. This means that the investor would get $10 every year as an interest. The current yield of the bond ( CY) is 2.5% ($10/$400). Now the bond prices move according to supply and demand in the market. There is yet another term called Yield to Maturity (YTM). YTM is simply IRR for all the coupons which the investor receives over the period of bond maturity. For eg. if in the above example the maturity period is 5 years, the investor would pay $400 at t0 to buy the bond. He/she would receive $10 each year till t5 and additionally $400 at t5. The IRR of this cashfl