The decline in yields has helped Spain's government debt return 3.4 percent, while Italy has gained 17.1 percent. The 17- nation euro-area has risen 9.2 percent on average, according to the Bloomberg/EFFAS indexes.

"The monetary authorities are going to do whatever it takes to stop any sharp rise in bond yields while they remain concerned about the growth outlook," said Steven Miller, a Sydney-based investor at BlackRock Inc., which oversees $3.7 trillion as the world's biggest money manager. "Central banks are buying a lot of government debt and if they keep on buying it, that is going to curtail any tendency for yields to rise."

Lowered Forecasts

The International Monetary Fund lowered its global growth forecast last month to the slowest pace since the 2009 recession. The economy will grow 3.3 percent this year and 3.6 percent next year, the IMF said on Oct. 9. That compares with July predictions of 3.5 percent in 2012 and 3.9 percent in 2013.

Investors are better off sticking with U.S. Treasuries, according to Gary Shilling, president of A. Gary Shilling & Co., an economic forecasting company in Springfield, New Jersey.

"There's no raging economic growth to justify what we're seeing" in equities markets, Shilling said Oct. 18 on Bloomberg Radio's "Taking Stock" with Pimm Fox and Courtney Donohoe. "This is really an opiate, all this stimulus."

Developed economies with high public debt potentially face "massive" losses of output lasting more than a decade, even if their interest rates remain low, Carmen Reinhart, Vincent Reinhart and Kenneth Rogoff wrote in a paper published in April on the National Bureau of Economic Research's website.

Debt Loads

They found that countries with debts exceeding 90 percent of the economy historically have experienced subpar growth for more than 20 years. Even with those dangers, the economists said they weren't advocating rapid reductions in government debt at times of "extremely weak growth and high unemployment."

Japan's debt of $11.5 trillion is the largest in the world and more than double the nation's annual gross domestic product, according to data compiled by Bloomberg. The U.S.'s $11 trillion is equivalent to 68 percent of GDP. Greece, Iceland, Italy, Singapore, Portugal and Ireland all have debt that exceeds the size of their economies, the data show.

After Portugal, the next best-performing government bond market is Ireland, with its debt returning 28 percent, followed by Hungary at 18 percent.