As of October 16, 2024, the yield for a ten-year U.S. government bond was 4.04 percent, while the yield for a two-year bond was 3.96 percent. This represents an inverted yield curve, whereby bonds of longer maturities provide a lower yield, reflecting investors' expectations for a decline in long-term interest rates. Hence, making long-term debt holders open to more risk under the uncertainty around the condition of financial markets in the future. That markets are uncertain can be seen by considering both the short-term fluctuations, and the long-term downward trend, of the yields of U.S. government bonds from 2006 to 2021, before the treasury yield curve increased again significantly in 2022 and 2023. What are government bonds? Government bonds, otherwise called ‘sovereign’ or ‘treasury’ bonds, are financial instruments used by governments to raise money for government spending. Investors give the government a certain amount of money (the ‘face value’), to be repaid at a specified time in the future (the ‘maturity date’). In addition, the government makes regular periodic interest payments (called ‘coupon payments’). Once initially issued, government bonds are tradable on financial markets, meaning their value can fluctuate over time (even though the underlying face value and coupon payments remain the same). Investors are attracted to government bonds as, provided the country in question has a stable economy and political system, they are a very safe investment. Accordingly, in periods of economic turmoil, investors may be willing to accept a negative overall return in order to have a safe haven for their money. For example, once the market value is compared to the total received from remaining interest payments and the face value, investors have been willing to accept a negative return on two-year German government bonds between 2014 and 2021. Conversely, if the underlying economy and political structures are weak, investors demand a higher return to compensate for the higher risk they take on. Consequently, the return on bonds in emerging markets like Brazil are consistently higher than that of the United States (and other developed economies). Inverted yield curves When investors are worried about the financial future, it can lead to what is called an ‘inverted yield curve’. An inverted yield curve is where investors pay more for short term bonds than long term, indicating they do not have confidence in long-term financial conditions. Historically, the yield curve has historically inverted before each of the last five U.S. recessions. The last U.S. yield curve inversion occurred at several brief points in 2019 – a trend which continued until the Federal Reserve cut interest rates several times over that year. However, the ultimate trigger for the next recession was the unpredicted, exogenous shock of the global coronavirus (COVID-19) pandemic, showing how such informal indicators may be grounded just as much in coincidence as causation.

Graph and download economic data for Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity, Quoted on an Investment Basis (DGS3MO) from 1981-09-01 to 2025-03-25 about bills, 3-month, maturity, Treasury, interest rate, interest, rate, and USA.

At the end of 2023, the yield on the 10-year U.S. Treasury bond was 3.96 percent. The highest yields could be observed in the early 1990s. What affects bond prices? The factors that play a big role in valuation and interest in government bonds are interest rate and inflation. If inflation is expected to be high, investors will demand a higher return on bonds. Country credit ratings indicate how stable the economy is and thus also influence the government bond prices. Risk and bonds Finally, when investors are worried about the bond issuer’s ability to pay at the end of the term, they demand a higher interest rate. For the U.S. Treasury, the vast majority of investors consider the investment to be perfectly safe. Ten-year government bonds from other countries show that countries seen as more risky have a higher bond return. On the other hand, countries in which investors do not expect economic growth have a lower yield.

In December 2024, the yield on a 10-year U.S. Treasury note was 4.39 percent, forecasted to decrease to reach 3.27 percent by August 2025. Treasury securities are debt instruments used by the government to finance the national debt. Who owns treasury notes? Because the U.S. treasury notes are generally assumed to be a risk-free investment, they are often used by large financial institutions as collateral. Because of this, billions of dollars in treasury securities are traded daily. Other countries also hold U.S. treasury securities, as do U.S. households. Investors and institutions accept the relatively low interest rate because the U.S. Treasury guarantees the investment. Looking into the future Because these notes are so commonly traded, their interest rate also serves as a signal about the market’s expectations of future growth. When markets expect the economy to grow, forecasts for treasury notes will reflect that in a higher interest rate. In fact, one harbinger of recession is an inverted yield curve, when the return on 3-month treasury bills is higher than the ten year rate. While this does not always lead to a recession, it certainly signals pessimism from financial markets.

Graph and download economic data for Market Yield on U.S. Treasury Securities at 1-Month Constant Maturity, Quoted on an Investment Basis (DGS1MO) from 2001-07-31 to 2025-03-25 about 1-month, bills, maturity, Treasury, interest rate, interest, rate, and USA.

Graph and download economic data for Market Yield on U.S. Treasury Securities at 5-Year Constant Maturity, Quoted on an Investment Basis, Inflation-Indexed (DFII5) from 2003-01-02 to 2025-03-25 about TIPS, maturity, securities, Treasury, interest rate, interest, real, 5-year, rate, and USA.

Nepal NP: Government Bond Yield: Long Term data was reported at 6.000 % pa in 2017. This stayed constant from the previous number of 6.000 % pa for 2016. Nepal NP: Government Bond Yield: Long Term data is updated yearly, averaging 8.750 % pa from Dec 1981 (Median) to 2017, with 37 observations. The data reached an all-time high of 13.542 % pa in 1990 and a record low of 6.000 % pa in 2017. Nepal NP: Government Bond Yield: Long Term data remains active status in CEIC and is reported by International Monetary Fund. The data is categorized under Global Database’s Nepal – Table NP.IMF.IFS: Treasury Bill and Government Securities Rates: Annual.

Market Overview:

The global mutual fund assets market size reached USD 76.4 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 180.1 Billion by 2033, exhibiting a growth rate (CAGR) of 10% during 2025-2033. The market is driven by technological advancements, demographic shifts, increasing disposable incomes in emerging economies, and a growing emphasis on diversified and sustainable investment strategies.

Mutual Fund Assets Market Trends/Drivers:

• Diversified Investment Portfolios: The global mutual fund assets market is growing on account of the increased investor preference for diversified portfolios. Mutual funds offer an accessible way to spread risk across various asset classes, appealing to both novice and experienced investors.
• Technological Advancements: Digital platforms and fintech innovations have democratized access to mutual funds. The integration of artificial intelligence (AI) and machine learning in investment strategies is enhancing personalization and optimizing portfolio management, attracting a tech-savvy investor base.
• Evolving Regulatory Landscape: Regulatory changes globally are aiming to increase transparency and investor protection. Stricter disclosure requirements and the enforcement of fiduciary responsibilities are building investor confidence and stimulating market growth.
• Shifting Demographic Profiles: An aging population in developed countries and rising disposable incomes in emerging markets are key drivers. Mutual funds cater to the varying needs of these demographics, from retirement planning to entry-level investment options.
• Sustainable Investing Trends: There is a noticeable shift toward environmental, social, and governance (ESG) themed mutual funds. This trend reflects a growing awareness of sustainability issues and their long-term impact on investment returns.
• Market Breakup by Investor Type: Institutional investors, with their large capital and long-term investment strategies, significantly influence the mutual fund assets market. Their substantial investments and strategic decision-making shape market dynamics.
• Regional Markets: North America leads in market share due to its advanced financial infrastructure and investment culture. Europe and Asia Pacific also show strong market presence, each with unique growth drivers and challenges.
• Distribution Channels: Financial advisors and brokers are the largest distribution channel, offering personalized investment advice. Banks and direct sellers, including online platforms, also play significant roles, catering to different investor preferences and behaviors.
• Market Potential and Challenges: The mutual fund assets market is supported by its adaptability to investor needs and market conditions. However, it faces challenges like market volatility, geopolitical uncertainties, and evolving regulatory environments.

Mutual Fund Assets Market Trends/Drivers:

Rising interest in diversified investment portfolios

One primary driver of the industry is the increasing inclination toward diversified investment portfolios. With the growing awareness of the risks associated with investing in a single asset class, individual and institutional investors are progressively seeking mutual funds as a means to diversify their investments. Mutual funds offer a blend of stocks, bonds, and other securities, thereby spreading the risk across various financial instruments and markets. This diversification helps mitigate the impact of volatility in any one sector or region and provides exposure to a broader range of growth opportunities. Additionally, mutual funds are managed by professional fund managers, who bring expertise in market analysis and portfolio strategy, further appealing to investors who may lack the time or expertise to manage their investments. This trend is particularly noticeable among new investors and those in emerging markets, where mutual funds are seen as a gateway to more sophisticated investment strategies.

Advancements in fintech

Another key driver is the technological advancements in the financial sector, particularly the emergence of fintech and robo-advisors. These innovations have significantly democratized access to mutual fund investments, making them more accessible to a broader audience. Online platforms and mobile applications have simplified the process of investing in mutual funds, offering user-friendly interfaces, easy account management, and lower entry barriers in terms of minimum investment requirements. Furthermore, the integration of artificial intelligence (AI) and machine learning (ML) in investment management has enabled more personalized and optimized investment strategies, enhancing the appeal of mutual funds. These technological advancements have streamlined the investment process as well as provided educational resources, thereby attracting a tech-savvy generation of investors and those new to financial markets.

Evolving regulatory landscape

The evolving regulatory landscape plays a crucial role in shaping the industry. Regulatory bodies worldwide have been focusing on increasing transparency, improving investor protection, and ensuring the stability of financial markets. These efforts include the implementation of stringent disclosure requirements, the promotion of fair valuation practices, and the enforcement of fiduciary responsibilities of fund managers. Such regulations aim to build investor confidence by ensuring that mutual funds operate in a fair, transparent, and accountable manner. Moreover, some regions have introduced tax incentives for mutual fund investments, further stimulating market growth.

Mutual Fund Assets Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the global, regional, and country levels for 2025-2033. Our report has categorized the market based on fund type, investor type, and distribution channel.

Breakup by Fund Type:

• Equity Funds
• Bond Funds
• Money Market Funds
• Hybrid and Other Funds
  

Equity funds account for the majority of the market share

The report has provided a detailed breakup and analysis of the market based on the fund type. This includes equity funds, bond funds, money market funds, and hybrid and other funds. According to the report, equity funds represented the largest segment.

Equity funds represent the leading fund type segment primarily due to their potential for higher returns over the long term. Despite the associated risks and market volatility, equity funds attract a broad spectrum of investors, from individuals seeking growth to institutional investors looking to maximize returns. Equity funds have gained traction due to historical performance, where equities have outperformed other asset classes over long periods. Additionally, with the increasing accessibility of global markets, equity funds offer diverse international exposure, allowing investors to benefit from growth in various economies. The popularity of these funds is also driven by their adaptability to cater to various investment strategies, from aggressive growth to value-oriented approaches, making them a versatile choice for many investors.

Bond funds are focused on investing in bonds and other debt

Angola AO: Treasury Bill Rate: Government Securities data was reported at 17.500 % pa in 2024. This records an increase from the previous number of 10.523 % pa for 2023. Angola AO: Treasury Bill Rate: Government Securities data is updated yearly, averaging 11.952 % pa from Dec 2004 (Median) to 2024, with 18 observations. The data reached an all-time high of 52.177 % pa in 2004 and a record low of 3.065 % pa in 2013. Angola AO: Treasury Bill Rate: Government Securities data remains active status in CEIC and is reported by International Monetary Fund. The data is categorized under Global Database’s Angola – Table AO.IMF.IFS: Treasury Bill and Government Securities Rates: Annual.

In the decade after the 2008 financial crisis, pension providers across faced challenging conditions thanks to interest rates falling to historical lows, affecting the returns on fixed-income investments, like bonds. However, despite interest rates picking up in recent years amid the inflationary environment, headwinds remain. Revenue is expected to drop at a compound annual rate of 4.2% over the five years through 2024 to €793 billion, including a forecast fall of 1.8% in 2024. Profit has also edged downwards due to rising interest rates hitting equity and bond markets, though the average industry profit margin still stands strong, at an estimated 43.5% in 2024. Pension providers invest the contributions of policyholders into investment markets like bonds and equity, with the aim of making sure their assets can meet their liabilities – the benefits paid to retirees. Pension funds invest heavily in bond markets due to their relatively low risk and low volatility. However, this type of fixed-income investment has struggled since 2022 in the rising base rate environment, which saw yields skyrocket and bond prices plummet, hitting investment income. Equity markets, an asset class that traditionally performed inversely to bonds when interest rates were low, also performed poorly, stunted by muted economic growth and rock bottom investor sentiment. However, at the tail end of 2023, optimism picked up, with investors pricing in rate cuts, a scenario that should support economic growth and, in turn, equity markets. Bond markets also experienced considerable capital inflows as investors looked to lock in higher yields before they fell in line with a declining interest rates. Revenue is anticipated to climb at a compound annual rate of 3% over the five years through 2029 to €919.2 billion, while the average industry profit margin is estimated to swell to 45.1%. Investment returns are set to improve in the short term as markets benefit from interest rate cuts and improving economic conditions. However, an ageing population will remain a concern for pension providers as more people retire and claim their retirement benefits, ratcheting up liabilities.

In the decade after the 2008 financial crisis, pension providers across faced challenging conditions thanks to interest rates falling to historical lows, affecting the returns on fixed-income investments, like bonds. However, despite interest rates picking up in recent years amid the inflationary environment, headwinds remain. Revenue is expected to drop at a compound annual rate of 4.2% over the five years through 2024 to €793 billion, including a forecast fall of 1.8% in 2024. Profit has also edged downwards due to rising interest rates hitting equity and bond markets, though the average industry profit margin still stands strong, at an estimated 43.5% in 2024. Pension providers invest the contributions of policyholders into investment markets like bonds and equity, with the aim of making sure their assets can meet their liabilities – the benefits paid to retirees. Pension funds invest heavily in bond markets due to their relatively low risk and low volatility. However, this type of fixed-income investment has struggled since 2022 in the rising base rate environment, which saw yields skyrocket and bond prices plummet, hitting investment income. Equity markets, an asset class that traditionally performed inversely to bonds when interest rates were low, also performed poorly, stunted by muted economic growth and rock bottom investor sentiment. However, at the tail end of 2023, optimism picked up, with investors pricing in rate cuts, a scenario that should support economic growth and, in turn, equity markets. Bond markets also experienced considerable capital inflows as investors looked to lock in higher yields before they fell in line with a declining interest rates. Revenue is anticipated to climb at a compound annual rate of 3% over the five years through 2029 to €919.2 billion, while the average industry profit margin is estimated to swell to 45.1%. Investment returns are set to improve in the short term as markets benefit from interest rate cuts and improving economic conditions. However, an ageing population will remain a concern for pension providers as more people retire and claim their retirement benefits, ratcheting up liabilities.

In the decade after the 2008 financial crisis, pension providers across faced challenging conditions thanks to interest rates falling to historical lows, affecting the returns on fixed-income investments, like bonds. However, despite interest rates picking up in recent years amid the inflationary environment, headwinds remain. Revenue is expected to drop at a compound annual rate of 4.2% over the five years through 2024 to €793 billion, including a forecast fall of 1.8% in 2024. Profit has also edged downwards due to rising interest rates hitting equity and bond markets, though the average industry profit margin still stands strong, at an estimated 43.5% in 2024. Pension providers invest the contributions of policyholders into investment markets like bonds and equity, with the aim of making sure their assets can meet their liabilities – the benefits paid to retirees. Pension funds invest heavily in bond markets due to their relatively low risk and low volatility. However, this type of fixed-income investment has struggled since 2022 in the rising base rate environment, which saw yields skyrocket and bond prices plummet, hitting investment income. Equity markets, an asset class that traditionally performed inversely to bonds when interest rates were low, also performed poorly, stunted by muted economic growth and rock bottom investor sentiment. However, at the tail end of 2023, optimism picked up, with investors pricing in rate cuts, a scenario that should support economic growth and, in turn, equity markets. Bond markets also experienced considerable capital inflows as investors looked to lock in higher yields before they fell in line with a declining interest rates. Revenue is anticipated to climb at a compound annual rate of 3% over the five years through 2029 to €919.2 billion, while the average industry profit margin is estimated to swell to 45.1%. Investment returns are set to improve in the short term as markets benefit from interest rate cuts and improving economic conditions. However, an ageing population will remain a concern for pension providers as more people retire and claim their retirement benefits, ratcheting up liabilities.

Graph and download economic data for Market Yield on U.S. Treasury Securities at 20-Year Constant Maturity, Quoted on an Investment Basis (DGS20) from 1962-01-02 to 2025-03-24 about 20-year, maturity, Treasury, interest rate, interest, rate, and USA.

As of November 2024, Luxembourg government bonds with maturities of close to ten years reached an average of 2.31 percent per annum. That was almost 0.8 percent less than the previous year. Treasury notes: a safe haven in times of trouble Ten-year government bonds, otherwise known as treasury notes, are debt obligations issued by a government which matures in ten years. They are considered a low-risk investment as they are backed by the government and their ability to raise taxes to cover its obligations. In August 2019, investors became more interested in these investments as global developments sparked uncertainty on the stock markets. Traditionally, government bonds from the U.S. and Germany have the highest liquidity. When stock exchanges fall with around ten percent, a German treasury note with an interest rate of around 2.43 percent is then considered a relatively safe place. What are other options to do with your money in Luxembourg? In March 2023, the interest rate of short-term household deposits (with an agreed maturity of up to one year) in Luxembourg was 2.35. This was the lowest of all Benelux countries (Belgium, Luxembourg and the Netherlands). Low interest rates on consumer savings are deemed a consequence of the monetary policy of the European Central Bank (ECB), as it maintains artificially low interest rates to increase inflation on the European continent. Low interest rates and uncertainty on the stock exchange might therefore explain investors’ interest in gold. The international price of gold per troy ounce has increased sharply in recent years.

The Real Estate Investment Trust (REIT) market is experiencing robust growth, projected to reach $2035.3 million by 2035, exhibiting a Compound Annual Growth Rate (CAGR) of 9.1%. This expansion is driven by several key factors. Increasing urbanization and population growth globally fuel demand for residential, commercial, and industrial spaces, creating lucrative investment opportunities for REITs. Favorable interest rate environments and government policies supporting real estate development further stimulate market activity. The diversification of REIT portfolios across various property types—including office, retail, residential, and industrial—mitigates risk and enhances returns. The rise of e-commerce and the consequent need for robust logistics infrastructure have significantly boosted the demand for industrial REITs. Furthermore, the increasing adoption of technology within the real estate sector, improving efficiency and transparency, contributes positively to market growth. Technological advancements also provide better data analysis, driving more informed investment decisions and optimizing asset management. However, the REIT market faces certain headwinds. Economic downturns or recessions can significantly impact occupancy rates and property values, affecting REIT performance. Geopolitical instability and fluctuations in global capital markets also introduce uncertainty. Furthermore, the rising costs of construction and materials can squeeze profit margins, particularly for new developments. Competition from other investment vehicles and the potential for oversupply in specific property sectors pose additional challenges. Despite these restraints, the long-term outlook for the REIT market remains positive, driven by enduring demand for real estate assets and the increasing institutionalization of real estate investments. The strategic adaptation of REITs to evolving market conditions and their ability to capitalize on emerging trends will play a crucial role in shaping their future success.

Graph and download economic data for Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity, Quoted on an Investment Basis (DGS2) from 1976-06-01 to 2025-03-24 about 2-year, maturity, Treasury, interest rate, interest, rate, and USA.

The U.S. bank prime loan rate has undergone significant fluctuations over the past three decades, reflecting broader economic trends and monetary policy decisions. From a high of 10.1 percent in 1990, the rate has seen periods of decline, stability, and recent increases. As of February 2025, the prime rate stood at 7.5 percent, marking a notable rise from the historic lows seen in the early 2020s. Federal Reserve's impact on lending rates The prime rate's trajectory closely mirrors changes in the federal funds rate, which serves as a key benchmark for the U.S. financial system. In 2023, the Federal Reserve implemented a series of rate hikes, pushing the federal funds target range to 5.25-5.5 percent by year-end. This aggressive monetary tightening was aimed at combating rising inflation, and its effects rippled through various lending rates, including the prime rate. Long-term investment outlook While short-term rates have risen, long-term investment yields have also seen changes. The 10-year U.S. Treasury bond, a benchmark for long-term interest rates, showed an average market yield of 2.13 percent in the second quarter of 2024, adjusted for constant maturity and inflation. This figure represents a recovery from negative real returns seen in 2021, reflecting shifting expectations for economic growth and inflation. The evolving yield environment has implications for both borrowers and investors, influencing decisions across the financial landscape.

Market Overview and Growth Potential The global convertible bond market has witnessed significant growth, boasting a value of million in 2025 and projected to reach an impressive value by 2033, exhibiting a robust CAGR. Key drivers behind this growth include the increasing demand for alternative investment options, low-interest rates encouraging fixed-income investors to seek higher yields, and the diversification benefits offered by convertible bonds. The market is segmented based on type (Vanilla Convertible Bond, Mandatory Convertible Bond, Reversible Convertible Bond) and application (Energy Industry, Financial Sector, Manufacturing, Real Estate, Traffic and Transportation). Competitive Landscape and Key Trends The convertible bond market is highly competitive, with established players such as Morgan Stanley, Goldman Sachs, and Merrill Lynch leading the industry. Companies are focusing on expanding their service offerings, enhancing their research capabilities, and leveraging technology to stay ahead in the market. Notable trends include the increasing popularity of structured notes, which offer tailored risk-return profiles, and the use of artificial intelligence (AI) to analyze market data and identify investment opportunities. Additionally, the demand for sustainable and green convertible bonds is expected to rise, driven by growing investor interest in ethical and impactful investments.

Due to financial unrest caused by the coronavirus outbreak in March 2020, the yield of ten-year governments in the Netherlands dropped significantly. During the last quarter 2021, the yield on 10-year government bonds was on average -0.26 percent. The beginning of 2022 saw the start of a positive yield with the rate resting at an average of 2.79 percent as of the second quarter of 2024. A ten-year government bond, or treasury note, is a debt obligation issued by a government which matures in ten years. They are considered to be a low-risk investment as they are backed by the government and their ability to raise taxes to cover its obligations. Investors track them, however, for several reasons. First, these bonds are the benchmark that guides other financial interest rates, such as fixed mortgage rates. Second, their yield will tell how investors feel about the economy. The higher the yield on a ten-year government bond, the better the economic outlook.

The Emerging Markets Bond Index (EMBI), commonly known as "riesgo país" in Spanish speaking countries, is a weighted financial benchmark that measures the interest rates paid each day by a selected portfolio of government bonds from emerging countries. It is measured in base points, which reflect the difference between the return rates paid by emerging countries' government bonds and those offered by U.S. Treasury bills. This difference is defined as "spread". Which Latin American country has the highest risk bonds? As of September 19, 2024, Venezuela was the Latin American country with the greatest financial risk and highest expected returns of government bonds, with an EMBI spread of around 254 percent. This means that the annual interest rates paid by Venezuela's sovereign debt titles were estimated to be exponentially higher than those offered by the U.S. Treasury. On the other hand, Brazil's EMBI reached 207 index points at the end of August 2023. In 2023, Venezuela also had the highest average EMBI in Latin America, exceeding 40,000 base points. The impact of COVID-19 on emerging market bonds The economic crisis spawned by the coronavirus pandemic heavily affected the financial market's estimated risks of emerging governmental bonds. For instance, as of June 30, 2020, Argentina's EMBI spread had increased more than four percentage points in comparison to January 30, 2020. All the Latin American economies measured saw a significant increase of the EMBI spread in the first half of the year.