After years of near-zero rates, global bond markets are making a powerful comeback. A new chart by BlackRock shows that over 80% of the fixed income universe now yields 4% or more—a dramatic reversal from just five years ago.

From 100% to 15% and Back Again: A Yield Resurgence Story

A July 2025 analysis by BlackRock Investment Institute, using LSEG Datastream data, presents a striking chart: the share of fixed income assets yielding at least 4% across key years—2000, 2005, 2010, 2015, 2020, and now 2025.

In 2000, nearly the entire fixed income market yielded above 4%. But by 2020, that number had collapsed to just over 15%, a consequence of ultra-accommodative monetary policies following the Global Financial Crisis and the COVID-19 pandemic. Now, in 2025, the trend has reversed with force: over 80% of fixed income instruments globally are once again delivering yields north of 4%—a turning point that reshapes portfolio strategies worldwide.

Emerging Markets Lead the New Yield Frontier

One of the most profound shifts is in who’s driving the returns. Back in 2000, a significant portion of high-yielding bonds came from eurozone governments. Fast forward to 2025, and emerging markets have taken center stage, accounting for a significant chunk of all high-yielding bonds.

Countries like Brazil, India, Indonesia, and South Africa now offer competitive yields driven by higher policy rates, resilient local economies, and growing demand for sovereign debt among global institutional players. These regions, once considered peripheral, are now primary drivers of fixed income alpha.

Corporate Credit and Structured Bonds Are Back in Play

Alongside sovereign EM debt, U.S. corporate bonds—both investment grade and high yield—have re-emerged as powerful components of income portfolios. With the Federal Reserve maintaining rates above 5% and credit spreads still attractive, investors are able to capture yields well above the 4% threshold even within the top-tier corporate space.

Also staging a return is the U.S. securitized credit market, which includes mortgage-backed securities (MBS), commercial mortgage-backed securities (CMBS), and asset-backed debt. With delinquency rates stable and risk premiums remaining elevated post-2023, these instruments are once again seen as attractive fixed income solutions—particularly for income-focused institutions like pensions and insurers.

Eurozone Government Debt: From Core to Irrelevant

Perhaps the most remarkable data point in the BlackRock chart is the collapse of eurozone sovereign debt as a contributor to 4%+ yielding instruments. Once accounting for 20% of the global high-yield fixed income landscape in 2000, the segment is virtually non-existent in 2025.

Despite a rate-hiking cycle by the European Central Bank, yields on German, French, and Spanish bonds remain too low to compete. Years of negative or near-zero rates have left a long shadow, and Europe’s macro environment is simply not conducive to generating meaningful yield in sovereign debt today.

A Strategic Shift: Bond Allocations Are No Longer Defensive Only

The implications for investors are significant. Fixed income, long seen as a defensive or stabilizing asset class, is once again a primary source of return. For asset allocators managing pension funds, insurance portfolios, or private wealth, the shift in the yield curve unlocks the ability to build income-oriented strategies without veering into excessive risk.

Notably, U.S. agency debt, which had been crowded out by low yields, has returned as a stronghold for capital-preserving investors. With yields in the 4–5% range, and implicit government backing, this segment is now more than a placeholder—it’s a core pillar of return.

Looking Ahead: A Structural Shift or a Temporary Spike?

While the current landscape is appealing, questions linger. Will central banks maintain elevated rates into 2026 and beyond? Could a sharp economic slowdown reignite calls for easing, pushing yields lower again? How vulnerable is high-yield debt to macro shocks or credit events?

Despite these uncertainties, 2025 marks a structural turning point. The fixed income market has expanded in both breadth and depth when it comes to offering competitive yields. This isn’t just a post-inflation blip—it’s the product of five years of monetary normalization, re-risking in global portfolios, and a rebalancing of demand toward real income.

Conclusion: The Income Era Is Back—Are Portfolios Ready?

BlackRock’s chart delivers a clear message: “Income is back.” And unlike previous cycles, this time it’s not limited to a narrow band of junk bonds or exotic markets. The yield is broad-based, diversified across geographies and credit tiers, and accessible to both institutional and retail investors.

The portfolios that will thrive in this environment are those that adapt—embracing emerging markets, re-engaging with corporate and structured debt, and shedding the outdated bias against fixed income in the search for yield. For the first time in decades, bonds aren’t just ballast—they’re engines of return.