Good news for bond bulls: as far as some of the world's biggest investors are concerned, negative yields will be a feature of Europe for years to come.

Vanguard Group says the euro zone's sluggish economy, where policy makers are barely halfway to reaching their inflation target, means monetary easing will persist, and sub-zero bond yields with it. Deutsche Asset Management predicts rates on benchmark German two-year notes will climb about 0.2 percentage point in 2017 — just twice the advance in the past month and keeping them well below the zero threshold.

Negative yields sound like a bad thing for investors, but for those who already own a bond, a drop in the rate — which is driven by a rising price — means a profit when it comes time to sell. And even if money managers don't see yields falling much from here, their faith in a sub-zero market shows they don't expect the selloff that started late last year to become a sustained rout, either.

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