EDITION 1, APRIL 2021
Janus Henderson Sovereign Debt Index

The Sovereign Debt Index is a long-term study into trends in government indebtedness around the world, the investment opportunities this provides and the risks it presents. It measures the extent to which the world’s governments are financing themselves with borrowings and how affordable and sustainable those borrowings are, comparing and contrasting trends around the world.

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Government debts jumped by over
one sixth (17.4%)
in 2020, rising by
US$9.3 trillion

The increase was equivalent to
one seventh (14.8%)
of global GDP

The steady fall in interest rates has driven dramatic returns for bond investors, but bond prices are now falling as the world economy begins
to recover

April 2021

Key findings

Unless otherwise stated all data is sourced by Janus Henderson Investors as of 30 June 2021.

Glossary of terms

Government debt The total amount of outstanding borrowing
Government budget deficit The annual shortfall between spending and taxation (if taxes exceed spending, governments have a budget surplus)
Counter-cyclical government spending When the economy is weak, the government spends money to support activity. When the economy is strong the government can cut spending to slow activity and help prevent overheating.
Fiscal consolidation When a government is reducing the budget deficit
Fiscal surplus When a government is raising more in tax than it spends on services
Quantitative easing Central banks buy bonds and other assets in exchange for newly created money as a means of increasing liquidity in the economy and suppressing interest rates. The objective is to support economic activity.
Bond A bond is parcel of debt. By buying a bond, investors give money to a borrower, usually for a fixed term and for a fixed rate of interest. Bonds can be bought and sold on financial markets, and the value changes over time with varying market conditions.
Running yield The interest paid on a bond divided by its current market value
Volatility Rapid, unpredictable, changeability
Yield to maturity The interest paid on a bond divided by its current market value, taking account of the capital gain or loss that will occur when the bond matures and is repaid.

Janus Henderson Sovereign Debt Index, Edition 1

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