The article examines causal relationships between sovereign credit default swaps (CDS) prices for the BRICS and most important EU economies (Germany, France, the UK, Italy, Spain) during the European debt crisis. The cross-correlation function (CCF) approach used in the research distinguishes between causality-in-mean and causality-in-variance. In both causality dimensions, the BRICS CDS prices tend to Granger cause those of the EU counterparts with the exception of Germany. Italy and Spain exhibit the highest dependence on the BRICS, whereas only India has a negative balance of outgoing and incoming causal linkages among the BRICS. Thus, the paper underscores the signs of decoupling effects in the sovereign CDS market and also supports the view that the European debt crisis has so far had a limited non-EU impact in this market.

Credit Default Swap Index Market Outlook

According to our latest research, the global Credit Default Swap Index market size reached USD 3.2 billion in 2024, driven by increasing demand for sophisticated risk management tools among institutional investors. The market is experiencing a robust growth trajectory, with a CAGR of 8.1% projected during the forecast period. By 2033, the Credit Default Swap Index market is anticipated to achieve a value of approximately USD 6.2 billion. This growth is primarily fueled by the rising need for credit risk mitigation, a surge in trading volumes, and the expansion of electronic trading platforms, which have collectively enhanced market accessibility and liquidity.

One of the primary growth factors for the Credit Default Swap Index market is the increasing complexity of global credit markets. As financial instruments and corporate debt structures become more intricate, institutional investors and financial intermediaries are turning to Credit Default Swap Indices as essential tools for managing portfolio risk and extracting credit exposure efficiently. These indices allow participants to hedge against systemic credit events, thereby providing a cost-effective and scalable solution for risk transfer. The growing awareness of credit risk, especially in volatile economic environments, is compelling market participants to integrate CDS indices into their risk management frameworks, further stimulating market growth.

Technological advancements and regulatory reforms have also played a pivotal role in shaping the Credit Default Swap Index market. The transition from over-the-counter (OTC) bilateral trading to centralized clearing and electronic platforms has significantly improved transparency, reduced counterparty risk, and enhanced operational efficiency. Regulatory mandates, such as those introduced under the Dodd-Frank Act in the United States and EMIR in Europe, have encouraged greater adoption of CDS indices by increasing trust and standardization in the marketplace. Additionally, the proliferation of advanced analytics and algorithmic trading tools has enabled more sophisticated strategies, attracting a broader array of market participants and further deepening liquidity.

Another significant driver is the diversification of end-users and applications. While banks and hedge funds have traditionally dominated the Credit Default Swap Index market, there is a notable uptick in participation from asset management firms, insurance companies, and even corporate treasuries. These entities are leveraging CDS indices not only for hedging and speculation but also for arbitrage and capital optimization strategies. The evolving landscape of credit exposures, coupled with the need for efficient capital allocation under stricter regulatory capital requirements, is prompting a wider adoption of these indices across various financial sectors.

From a regional perspective, North America and Europe are the leading hubs for Credit Default Swap Index activity, accounting for the majority of global trading volumes and innovation in product structuring. However, Asia Pacific is emerging as a high-growth region, driven by financial market liberalization, increased corporate bond issuance, and growing sophistication among institutional investors. Meanwhile, regions such as Latin America and the Middle East & Africa are gradually gaining traction, supported by regulatory reforms and the entry of global financial institutions into local markets. This regional diversification is expected to contribute substantially to the market’s expansion over the next decade.

Product Type Analysis

The Credit Default Swap Index market is segmented by product type into Single-Name CDS Index and Multi-Name CDS Index. The Single-Name CDS Index segment primarily caters to investors seeking exposure to the credit risk of individual corporate or sovereign entities. This segment is characterized by its use in highly targeted hedging strategies, allowing market participants to isolate and manage specific credit events. Single-name indices are particularly valuable for managing idiosyncratic risk, and their popularity has grown as investors look for precision in credit risk management amid rising corporate defaults and credit downgrades. The breadth of available single-name indices has expanded in recent years, encompassing a diverse range of issuers across sectors and geographi

Loan Credit Default Swaps Market Outlook

According to our latest research, the global Loan Credit Default Swaps (CDS) market size reached USD 1.27 trillion in 2024. The market is experiencing robust expansion, propelled by evolving risk management strategies and the increasing complexity of global credit markets. The Loan Credit Default Swaps market is projected to grow at a CAGR of 7.8% from 2025 to 2033, reaching a forecasted market size of USD 2.51 trillion by 2033. This growth is primarily attributed to heightened demand for credit risk mitigation tools among financial institutions and the rising need for transparent, liquid, and efficient hedging instruments in the wake of global economic uncertainties.

One of the principal growth drivers for the Loan Credit Default Swaps market is the intensification of credit risk in both developed and emerging markets. As global debt levels rise and economic cycles become increasingly unpredictable, financial institutions and investors are seeking advanced instruments to hedge against potential defaults. The increasing sophistication of financial markets has led to a greater reliance on credit derivatives such as CDS to manage exposures and protect against losses. Furthermore, regulatory reforms post-2008 financial crisis have encouraged greater transparency and standardization in the CDS market, making these instruments more accessible and appealing to a wider array of market participants.

Another significant factor fueling the expansion of the Loan Credit Default Swaps market is the diversification of product offerings. Market participants are not only utilizing single-name CDS but are also increasingly engaging with index CDS and basket CDS to gain exposure to broader credit markets or specific segments. This diversification allows investors and institutions to tailor their risk management strategies more precisely, aligning with their unique risk appetites and investment objectives. The proliferation of customized CDS contracts, alongside the growth of standard contracts, is further enhancing the flexibility and appeal of these products, thereby driving market growth.

Technological advancements and digitalization are also playing a pivotal role in shaping the Loan Credit Default Swaps market. The adoption of advanced analytics, machine learning, and blockchain technology is streamlining the trading, pricing, and settlement of CDS contracts. These innovations are reducing operational risks, minimizing transaction costs, and improving overall market efficiency. Additionally, the integration of real-time data analytics is enabling market participants to make more informed decisions, thus increasing the attractiveness of CDS as a risk management tool. This digital transformation is expected to continue supporting the growth trajectory of the Loan Credit Default Swaps market over the forecast period.

From a regional perspective, North America remains the dominant market for Loan Credit Default Swaps, accounting for a substantial share of global volumes. The region’s mature financial infrastructure, coupled with the presence of major international banks and asset managers, underpins its leadership position. Europe follows closely, supported by a well-established regulatory framework and a high degree of market sophistication. Meanwhile, the Asia Pacific region is witnessing rapid growth, driven by financial sector liberalization and increasing adoption of risk management tools in emerging economies such as China and India. Latin America and the Middle East & Africa, though smaller in market size, are expected to register above-average growth rates as financial markets deepen and regulatory frameworks evolve to support derivative trading.

Product Type Analysis

The Loan Credit Default Swaps market is segmented by product type into Single-name CDS, Index CDS, Basket CDS, and Others. Single-name CDS remains the most widely used product type, accounting for the largest share of the market in 2024. These instruments allow investors to hedge or speculate on the credit risk associated with a specific reference entity, such as a corporation or sovereign government. The popularity of single-name CDS stems from their simplicity, liquidity, and the direct exposure they provide to individual credit events. Financial institutions, asset managers, and hedge funds frequently use single-name CDS to manage exposures in their loan portfolios or to express views on the creditworthiness of specific entities.

Credit Default Swaps Market Outlook

According to our latest research, the global Credit Default Swaps (CDS) market size reached USD 4.7 trillion in 2024, demonstrating robust activity across all major financial centers. The market is expected to expand at a CAGR of 6.2% from 2025 to 2033, driven by evolving risk management strategies and increased demand for credit protection instruments. By 2033, the forecasted market size is projected to reach USD 8.1 trillion, highlighting the growing significance of credit derivatives in global financial markets. This growth is underpinned by heightened awareness of credit risk, regulatory developments, and the ongoing digital transformation within the financial services sector.

One of the primary growth factors for the Credit Default Swaps market is the rising complexity of credit risk in a rapidly changing economic environment. As corporate and sovereign debt levels continue to rise globally, investors and financial institutions are increasingly turning to CDS contracts to hedge against potential defaults and credit events. The proliferation of new debt instruments, coupled with the uncertain macroeconomic outlook in several regions, has led to a surge in demand for effective credit risk transfer mechanisms. Furthermore, the ability of CDS to provide real-time pricing and transparency has made them an indispensable tool for sophisticated risk management, especially for large institutional investors and multinational banks.

Another significant driver is the ongoing innovation in financial products and the digitalization of trading platforms. The integration of advanced analytics, artificial intelligence, and blockchain technology into CDS trading has enhanced market efficiency, reduced operational risks, and improved settlement processes. These technological advancements have also enabled the development of more customizable and complex CDS structures, catering to the diverse needs of market participants. As a result, the market has witnessed increased participation from non-traditional players such as hedge funds, asset managers, and even fintech firms, further fueling growth and liquidity in the CDS ecosystem.

Regulatory reforms and the standardization of CDS contracts have also played a pivotal role in market expansion. Post-2008 financial crisis, global regulatory bodies introduced stringent measures to enhance transparency, reduce counterparty risk, and promote central clearing of CDS trades. These initiatives have restored investor confidence and attracted new entrants to the market by mitigating systemic risks. The adoption of standardized documentation and contract terms has not only reduced legal ambiguities but also facilitated cross-border trading, thereby broadening the market’s geographic reach and deepening its liquidity pool.

From a regional perspective, North America continues to dominate the Credit Default Swaps market, accounting for the largest share in 2024, followed closely by Europe and Asia Pacific. The United States, with its mature financial infrastructure and deep capital markets, remains at the forefront of CDS innovation and trading volumes. However, Asia Pacific is emerging as a high-growth region, propelled by rapid financial sector development, increasing foreign investment, and regulatory modernization. Meanwhile, Europe’s established banking sector and active debt markets ensure its continued relevance in the global CDS landscape. The Middle East & Africa and Latin America, while still nascent, are gradually integrating CDS instruments into their risk management frameworks, signaling long-term growth potential for these regions.

Product Type Analysis

The Credit Default Swaps market is segmented by product type into Single-name CDS, Index CDS, Basket CDS, and Others. Single-name CDS remain the most widely traded product, representing a significant portion of the overall market volume in 2024. These instruments allow investors to hedge or speculate on the creditworthiness of a single reference entity,

Global credit derivatives (gross - gross), for credit default swaps, total (all currencies), total (all currencies), total (all maturities), hedge funds, All countries (total), All countries (total), total (all ratings), total (all sectors), total (all methods), gross negative market values

Interest Rate Swaps Market Outlook

According to our latest research, the global interest rate swaps market size reached USD 3.18 trillion in 2024, demonstrating a robust presence in the global derivatives landscape. The market is projected to expand at a CAGR of 6.1% from 2025 to 2033, with the total market value forecasted to reach USD 5.41 trillion by 2033. This steady growth is primarily driven by the increasing volatility in interest rates, the rising need for risk management solutions among financial institutions and corporates, and the ongoing development of sophisticated financial products. As per our latest research, the demand for interest rate swaps continues to surge, underpinned by macroeconomic shifts and evolving regulatory frameworks.

The growth of the interest rate swaps market is significantly influenced by the heightened volatility in global interest rates. Central banks across various regions have adopted divergent monetary policies in response to inflationary pressures, economic recovery post-pandemic, and geopolitical uncertainties. These policy shifts have resulted in unpredictable interest rate movements, prompting financial institutions, corporates, and governments to seek effective hedging mechanisms. Interest rate swaps, by enabling parties to exchange fixed and floating rate obligations, offer a flexible solution to manage interest rate exposure. The proliferation of advanced analytics and risk management tools has further empowered market participants to optimize their swap strategies, thereby fueling market expansion.

Another key growth factor for the interest rate swaps market is the increasing sophistication and participation of non-bank entities. Corporates are now more proactive in managing their debt portfolios, leveraging swaps to lock in favorable rates, reduce borrowing costs, and enhance financial predictability. The emergence of fintech platforms and electronic trading venues has made it easier for smaller institutions and corporates to access swap markets, democratizing participation and boosting overall transaction volumes. Additionally, the integration of artificial intelligence and machine learning in pricing and risk assessment is enhancing transparency and efficiency, further attracting new entrants and driving market growth.

Regulatory developments also play a pivotal role in shaping the trajectory of the interest rate swaps market. Post-2008 reforms, such as the Dodd-Frank Act in the United States and EMIR in Europe, have increased the transparency and security of swap transactions by mandating central clearing for standardized contracts and enhancing reporting requirements. These regulations have not only mitigated counterparty risk but also encouraged greater adoption of interest rate swaps among institutional investors. Furthermore, the transition from LIBOR to alternative reference rates has led to a surge in swap activity as market participants restructure existing contracts and adapt to new benchmarks, thereby sustaining market momentum.

From a regional perspective, North America and Europe continue to dominate the interest rate swaps market due to the maturity of their financial systems, high levels of institutional participation, and advanced regulatory environments. However, the Asia Pacific region is emerging as a significant growth engine, driven by rapid financial market liberalization, rising cross-border investments, and the increasing sophistication of local financial institutions. Latin America and the Middle East & Africa, while currently representing smaller shares, are expected to witness accelerated growth as financial infrastructure improves and market awareness increases. Overall, the global interest rate swaps landscape is poised for sustained expansion, supported by a confluence of macroeconomic, technological, and regulatory factors.

The role of Credit Default Swap Index in the financial markets has been increasingly significant, particularly as investors and institutions seek to manage credit risk more effectively. These indices aggregate the credit default swaps of various entities, providing a benchmark for credit risk assessment and trading. By offering a standardized measure of credit risk, Credit Default Swap Indices facilitate greater market transparency and liquidity, allowing participants to hedge or speculate on the credi

The FR 2436 report collects data on notional amounts and gross market values of the volumes outstanding of over-the-counter (OTC) derivatives in broad categories--foreign exchange, interest rate, equity- and commodity-linked, and credit default swaps--across a range of underlying currencies, interest rates, and equity markets.

ABSTRACT This paper investigates the drivers of long term real interest rates in Brazil. It is shown that long term yield on inflation linked bonds are driven by yields on 10 year interest rates of United States (US) government bonds and 10 year risk premium, as measured by the Credit Default Swap (CDS). Long term interest rates in Brazil were on a downward trend, following US real rates and stable risk premium, until the taper tantrum in the first half of 2013. From then onwards, real interest rates rose due to the increase in US real rates in anticipation of the beginning of monetary policy normalization and, more recently, due to a sharp increase in Brazilian risk premium. Policy interest rates do not significantly affect long term real interest rates.

In this paper, a flexible pricing model for Credit Contingent Interest Rate Swap (CCIRS) with credit rating migration is proposed, which is sensitive to stochastic interest rates and counterparty default risk. This is a new pricing model for CCIRS. The counterparty of the underlying interest rate swap (IRS) is considered to have a high and a low credit grade, and credit rating migration is modelled by the first attempt of the interest rate based on the structural framework. Furthermore, the default event for the underlying IRS is modelled using the reduced-form framework. The partial differential equation (PDE) satisfied by the value of CCIRS with credit rating migration is derived by analysing the cash flow of a CCIRS contract. Finally, the numerical results and parameter analysis, which are solved by using the alternating direction implicit (ADI) method, are discussed and the convergence rate of the numerical algorithm combined with a regular explicit scheme is also suggested.

Swap Futures Market Outlook

According to our latest research, the global swap futures market size reached USD 1.42 trillion in 2024, with a robust compound annual growth rate (CAGR) of 18.7%. This dynamic market is projected to achieve a valuation of USD 7.82 trillion by 2033, driven by the increasing demand for transparent, standardized, and risk-mitigating financial instruments in both developed and emerging economies. Growth in the swap futures market is primarily fueled by regulatory reforms, rising volatility in interest rates and currencies, and the ongoing digitization of trading platforms.

One of the most significant growth factors for the swap futures market is the tightening of global financial regulations, especially in the aftermath of the 2008 financial crisis. Regulatory bodies such as the Commodity Futures Trading Commission (CFTC) and the European Securities and Markets Authority (ESMA) have implemented stringent requirements for over-the-counter (OTC) derivatives, promoting the adoption of exchange-traded swap futures. These regulations enhance market transparency, reduce systemic risk, and encourage market participants to shift from traditional OTC swaps to standardized swap futures contracts. As a result, financial institutions and corporate treasuries are increasingly leveraging swap futures to manage interest rate, credit, and currency risks in a more secure and compliant manner.

Technological advancements in trading platforms have also played a pivotal role in the expansion of the swap futures market. The proliferation of sophisticated electronic trading systems has facilitated faster, more efficient, and cost-effective execution of swap futures contracts. Enhanced liquidity, real-time price discovery, and improved risk management tools offered by modern trading platforms are attracting a broader spectrum of end-users, including hedge funds, asset managers, and even retail investors. Furthermore, the integration of artificial intelligence and machine learning within trading algorithms is enabling market participants to capitalize on arbitrage and speculation opportunities, further driving market growth.

Another critical factor propelling the swap futures market is the heightened volatility in global interest rates, credit spreads, and currency exchange rates. The ongoing macroeconomic uncertainties, including inflationary pressures, geopolitical tensions, and monetary policy shifts, have led to increased demand for effective hedging instruments. Swap futures provide a flexible and standardized solution for mitigating such risks, enabling corporations and institutional investors to safeguard their portfolios against adverse market movements. The growing awareness of risk management best practices and the need for efficient capital allocation are expected to sustain the upward trajectory of the swap futures market in the coming years.

From a regional perspective, North America continues to dominate the swap futures market, accounting for nearly 42% of the global market share in 2024. The region’s leadership is underpinned by a mature financial ecosystem, robust regulatory frameworks, and the presence of leading trading platforms such as the Chicago Mercantile Exchange (CME). Europe follows closely, supported by the adoption of MiFID II regulations and a strong institutional investor base. Meanwhile, the Asia Pacific region is witnessing the fastest growth, with a CAGR of 21.3%, fueled by rapid financial market development, economic expansion, and increasing participation from regional banks and corporations. Latin America and the Middle East & Africa, while still emerging, are gradually integrating swap futures into their risk management strategies, reflecting the global reach and potential of this market.

Product Type Analysis

The swap futures market is segmented by product type into interest rate swap futures, credit default swap futures, currency swap futures, commodity swap futures, and others. Interest rate swap futures represent the largest and most liquid segment, accounting for more than 55% of the total market in 2024. Their dominance is attributed to the persistent volatility in global interest rates and the need for standardized risk management solutions among banks, asset managers, and corporations. These instruments enable market participants to hedge against fluctuations in benchmark interest rates such as LIBO

Lehman Brothers, the fourth largest investment bank on Wall Street, declared bankruptcy on the 15th of September 2008, becoming the largest bankruptcy in U.S. history. The investment house, which was founded in the mid-19th century, had become heavily involved in the U.S. housing bubble in the early 2000s, with its large holdings of toxic mortgage-backed securities (MBS) ultimately causing the bank's downfall. The bank had expanded rapidly following the repeal of the Glass-Steagall Act in 1999, which meant that investment banks could also engage in commercial banking activities. Lehman vertically integrated their mortgage business, buying smaller commercial enterprises that originated housing loans, which allowed the bank to expand its MBS holdings. The downfall of Lehman and the crash of '08 As the U.S. housing market began to slow down in 2006, the default rate on housing loans began to spike, triggering losses for Lehman from their MBS portfolio. Lehman's main competitor in mortgage financing, Bear Stearns, was bought by J.P. Morgan Chase in order to prevent bankruptcy in March 2008, leading investors and lenders to become increasingly concerned about the bank's financial health. As the bank relied on short-term funding on money markets in order to meet its obligations, the news of its huge losses in the third-quarter of 2008 further prevented it from funding itself on financial markets. By September, it was clear that without external assistance, the bank would fail. As its losses from credit default swaps mounted due to the deepening crash in the housing market, Lehman was forced to declare bankruptcy on September 15, as no buyer could be found to save the bank. The collapse of Lehman triggered panic in global financial markets, forcing the U.S. government to step in and bail-out the insurance giant AIG the next day on September 16. The effects of this financial crisis hit the non-financial economy hard, causing a global recession in 2009.

Abstract This paper aims to study the central importance assumed by the derivatives market in the dynamics of contemporary capitalism, focusing in particular on the credit derivatives market and its contribution to the formation and the outbreak of the financial crisis that impacted the U.S. and the world economy in 2007/2008. This dimension is marked by the derivative form, that changes the property relations, introduces new agents and motivations, increases financial integration between the agents and transforms the pricing logic of the major financial markets. Therefore, the paper describes the transformation that the American mortgage market went through,, arguing that such changes gain renewed vigor and are only completed with the rise and growth of credit default swaps (CDS) and synthetic CDOs, that were fundamental to the maintenance of low interest rates on mortgages, thus contributing directly to the bubble in the property market that resulted in the economic crisis.

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Structured Finance Market Size 2025-2029

The structured finance market size is valued to increase by USD 1128.5 billion, at a CAGR of 11.9% from 2024 to 2029. Increasing demand for alternative investment products will drive the structured finance market.

Major Market Trends & Insights

APAC dominated the market and accounted for a 42% growth during the forecast period.
By End-user - Large enterprises segment was valued at USD 771.40 billion in 2023
By Type - CDO segment accounted for the largest market revenue share in 2023

Market Size & Forecast

Market Opportunities: USD 163.86 billion
Market Future Opportunities: USD 1128.50 billion
CAGR from 2024 to 2029 : 11.9%

Market Summary

The market is witnessing significant growth due to the increasing demand for alternative investment products. This trend is driven by investors' quest for yield and risk diversification, particularly in an era of low-interest rates. One notable development in this space is the increasing popularity of Environmental, Social, and Governance (ESG) linked structured finance products. These instruments offer investors the opportunity to align their investments with their values while also potentially achieving attractive returns. Another factor fueling market growth is the increasing complexity of structured finance products. As financial institutions seek to innovate and differentiate themselves, they are developing increasingly sophisticated structures to meet the evolving needs of their clients.
For instance, a leading global manufacturing company recently optimized its supply chain financing by implementing a structured finance solution. This enabled the company to improve its working capital position and enhance operational efficiency, resulting in a significant reduction in days sales outstanding (DSO) by 15%. Despite these opportunities, the market faces challenges, including regulatory compliance and counterparty risk. As financial regulations continue to evolve, institutions must ensure that their structured products comply with the latest rules and regulations. Additionally, managing counterparty risk remains a critical concern, particularly in the wake of the 2008 financial crisis. To mitigate these risks, institutions are increasingly leveraging technology and Data Analytics to assess and monitor counterparty risk in real-time.
In conclusion, the market is experiencing robust growth, driven by increasing demand for alternative investment products and the development of innovative structures. While challenges persist, institutions that can effectively navigate the complex regulatory landscape and manage counterparty risk will be well-positioned to capitalize on the opportunities in this dynamic market.

What will be the Size of the Structured Finance Market during the forecast period?

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How is the Structured Finance Market Segmented ?

The structured finance industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

End-user

  Large enterprises
  SMEs


Type

  CDO
  Asset-backed securities
  Mortgage-backed securities


Product

  Loans
  Bonds
  Mortgages
  Credit card and trade receivables
  Others


Application Type

  Real Estate
  Automotive
  Consumer Credit
  Infrastructure


Geography

  North America

    US
    Canada


  Europe

    France
    Germany
    UK


  APAC

    Australia
    China
    India
    Japan
    South Korea


  Rest of World (ROW)

By End-user Insights

The large enterprises segment is estimated to witness significant growth during the forecast period.

In the dynamic world of structured finance, major enterprises play a pivotal role, engaging in intricate financing agreements to manage their capital and mitigate risk. Structured finance transactions involve the combination of various financial instruments, including bonds, mortgages, and loans, which are then securitized and sold to investors. This process enables businesses to raise capital by transferring related risks, with large businesses often serving as the original creators of the underlying assets. The market is characterized by ongoing activities and evolving patterns. For instance, portfolio risk management strategies involve the use of credit derivatives, such as credit default swaps and interest rate swaps, for hedging purposes.

Leveraged finance and Private Equity financing employ synthetic securitization techniques, like structured notes and synthetic collateralized debt obligations, to optimize capital structures. Credit rating agencies assess credit risk, while investment grade ratings provide benchmarks for investors. Liquidity management and due diligence processes

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Fixed Income Assets Management Market Size 2025-2029

The fixed income assets management market size is valued to increase USD 9.16 tr, at a CAGR of 6.3% from 2024 to 2029. Increasing investment in fixed income assets will drive the fixed income assets management market.

Major Market Trends & Insights

North America dominated the market and accounted for a 35% growth during the forecast period.
By Type - Core segment was valued at USD 13.18 tr in 2023
By End-user - Enterprises segment accounted for the largest market revenue share in 2023

Market Size & Forecast

Market Opportunities: USD 55.33 tr
Market Future Opportunities: USD 9156.40 tr
CAGR : 6.3%
North America: Largest market in 2023

Market Summary

The market encompasses the management and investment in various types of debt securities, including bonds and treasuries. Core technologies and applications, such as portfolio optimization algorithms and risk management tools, play a crucial role in this market's continuous evolution. One significant trend is the increasing adoption of bond exchange-traded funds (ETFs), which accounted for over 20% of global fixed income assets under management in 2021.
However, the market faces challenges, including transaction risks and regulatory changes. For instance, the European Securities and Markets Authority's (ESMA) updated guidelines on MiFID II reporting requirements have impacted market participants. Despite these challenges, opportunities persist, including the growing demand for active management strategies and the increasing popularity of alternative investment-grade bonds.

What will be the Size of the Fixed Income Assets Management Market during the forecast period?

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How is the Fixed Income Assets Management Market Segmented and what are the key trends of market segmentation?

The fixed income assets management industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD tr' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Type

  Core
  Alternative


End-user

  Enterprises
  Individuals


Geography

  North America

    US
    Canada


  Europe

    France
    Germany
    Italy
    UK


  APAC

    China
    India
    Japan
    South Korea


  Rest of World (ROW)

By Type Insights

The core segment is estimated to witness significant growth during the forecast period.

Fixed Income Asset Management (FIAM) is a strategic investment approach that focuses on managing a diversified mix of US dollar-denominated fixed-income securities. This strategy encompasses various types of securities, including investment-grade bonds, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities (RMBS), asset-backed securities (ABS), US government bonds, corporate debt, and other securitized assets. FIAM strategies employ rigorous research and risk management techniques to deliver consistent, solid returns, balancing both capital growth and income objectives. Portfolio managers meticulously blend securities across issuers, maturities, and jurisdictions to cater to the varying requirements of investors. Quantitative bond strategies, such as yield curve modeling and duration and convexity analysis, play a crucial role in FIAM.

These strategies help in assessing the risk-reward trade-off and optimizing the portfolio's sensitivity to interest rate changes. Interest rate swaps and other interest rate derivatives are essential tools in managing FIAM. They enable portfolio managers to hedge against interest rate risk and adjust the portfolio's duration to maintain an optimal risk profile. Performance attribution models and option-adjusted spread analysis are essential for evaluating the effectiveness of FIAM strategies. These models help in understanding the contribution of various factors to the portfolio's overall performance. Liquidity risk management is another critical aspect of FIAM. Portfolio managers employ various techniques, such as securitization and debt portfolio optimization, to manage liquidity risk and ensure that the portfolio remains accessible to investors.

Global macroeconomic factors, such as inflation, economic growth, and interest rates, significantly impact the FIAM market. Inflation-linked securities and credit default swaps are popular instruments used to hedge against inflation risk and credit risk, respectively. The FIAM market is experiencing steady growth, with an increasing number of investors recognizing the benefits of this investment strategy. According to recent studies, the market is projected to expand by approximately 12% in the coming year. Additionally, there has been a significant increase in the adoption of quantitative bond strategies, with over 40% of portfolio managers re