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The Global Fixed Income Assets Management Market size is estimated to grow by USD 8,372.3 billion at a CAGR of 6.15% between 2023 and 2028. There is a notable increase in investment in fixed income assets, driven by a growing emphasis on tax savings and a rising interest in security trading. Investors are increasingly turning to fixed income instruments as a reliable avenue for stable returns while optimizing tax liabilities. This trend reflects a strategic shift towards balancing investment portfolios with tax-efficient strategies, leveraging opportunities in the fixed income market. Simultaneously, the growth in security trading underscores a dynamic market environment where investors seek liquidity and potential capital gains. These developments highlight the evolving landscape of financial markets, where both individual and institutional investors prioritize both stability and tax advantages in their investment decisions.
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Investing in fixed income funds involves allocating capital to fixed income securities such as corporate bonds and Treasuries, managed by asset managers who navigate interest rate fluctuations and credit market volatility. These funds cater to investors' risk tolerance and financial goals, offering interest payments and potential dividend income based on the fund maturity and principal amount invested. Amid economic uncertainty, fixed income ETFs and mutual funds provide diversified exposure, mitigating market risk compared to individual debt securities. Institutional and individual investors alike opt for index investing or rely on active managers and hedge funds to capitalize on opportunities while managing default risk. For those seeking income stability and capital preservation, fixed income investments serve as essential components of a balanced portfolio, ensuring steady returns amidst fluctuating interest rates and broader economic conditions.
Increasing investment in fixed income assets is a primary factor driving the fixed income assets management market growth. Fixed income assets and securities provide investors with a predetermined amount of cash flows, typically in the form of fixed interest or dividends, making it less risky than stocks while offering a steady stream of income. Fixed-income assets diversify the risk of the stock market and offer capital preservation, income generation, and the potential for profitable returns. As a result, investors can rely on fixed income assets for guaranteed income and secured returns. Due to these advantages, individuals and enterprises are increasingly investing in fixed income assets, creating a demand for fixed income asset management services. This trend is expected to drive the market's growth during the forecast period.
The growth of bond ETFs is major trend in the fixed income assets management market. An ETF that only holds corporate or government bonds is known as a fixed income ETF or simply a bond ETF. There is high growth potential in bond ETFs as institutions find it more difficult to access individual bonds. To facilitate large transactions, investors are likely to use bond ETFs instead of single securities. Bond ETFs also allow efficient trading of securities that would otherwise be difficult and expensive to access individually. According to BlackRock Inc., one of the major vendors in the global ETF industry, trading individual bonds from more than 50 countries can be as much as 65 times more expensive than bond ETFs. Therefore, more investors are expected to show interest in bond ETFs, which will further fuel the growth of the market during the forecast period.
Transaction risks is a major challenge in the fixed income assets management market. Transaction risks arise when a company operates or records financial transactions in a foreign currency. For instance, a Canadian corporation doing business in China faces foreign exchange risks as it accepts transactions in yuan but presents financial statements in Canadian dollars. The time duration between a transaction and settlement is the primary source of transaction risks, and changes in exchange rates can cause losses or gains. Companies can mitigate these risks using forward contracts or options. However, global fixed income assets management market growth may be impeded by transaction risks due to potential losses resulting from currency fluctuations.
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The market share growth by the core segment will be significant during the forecast period. The core fixed income (CFI) strategy is a value-oriented fixed-income strategy that invests primarily in a diversified mix of investment-grade fixed-income securities denominated in US dollars, particularly in securitized assets such as commercial mortgage-backed securities, residential mortgage-backed securities, and asset-backed securities as well as US government, corporate, and corporate debt. By carefully managing portfolios within a framework that involves a significant amount of research and risk management, CFI strategies aim to deliver consistent, solid performance. Such factors will increase segment growth during the forecast period.
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The core segment was valued at USD 12,592.80 billion in 2018. In this segment, while acknowledging the significance of capital growth and income goals, CFI strategies place a strong emphasis on overall return. CFI portfolio managers blend these numerous securities across issuers, maturities, and jurisdictions to fulfill the various needs of investors. The staple of any CFI allocation and high-quality bonds have become an increasing source of concern for the majority of investment portfolios in recent years. While stocks rose, low yields limited the income they were able to generate. The construction of a portfolio can still benefit from using CFI assets. In times of intense market stress, core fixed-income allocations have offered downside protection. These assets will continue to be crucial in managing portfolio risks because they minimize portfolio volatility, which lowers the likelihood of unanticipated and potentially unpleasant outcomes. Thus, all these factors will increase the demand for CFI assets, which, in turn, will drive the demand for fixed-income asset management services during the forecast period.
Fixed income asset management is commonly used in commercial, investment, financial, and other related enterprises to preserve capital and income. Compared to stocks, fixed income offers a more reliable income source with lower risk, making it an attractive option for diversifying investment portfolios. Fund managers actively manage fixed income to adjust to changes in interest rates and economic conditions, making it an essential tool for generating additional income and attractive returns. The benefits of using fixed income asset management will likely increase its use in enterprises and drive market growth.
North America is estimated to contribute 35% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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North America dominates the global fixed income assets management market in 2022 and is expected to remain the largest segment in the forecast period. This is due to the high trading activity and the significant presence of the US equity market, which holds over 40% of the global market share as of August 2021. Fixed income assets and equity contribute over half of the asset management portfolio, with a notable shift from active to passive investment techniques in North America in recent decades.
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Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the Fixed Income Assets Management Market. One of the major companies in the market include:
WSP Global Inc.- The company offers fixed income asset management through GIS modeling, predictive modeling, failure analysis, and rehabilitation design.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market companies. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified. Furthermore, it is also quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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Investors seeking to lower market risk often turn to debt fixed income funds comprising government and corporate bonds, managed by asset management firms like DWS. These funds mitigate liquidity issues associated with equity fund of funds and provide stability through regular interest payments from government bonds and municipal bonds. In the financial sector, including insurance companies and pension funds, fixed income investments serve as a vital asset class alongside high yield bonds in the enterprises segment. The Federal Reserve influences the secondary market for 10-year Treasury securities, affecting bid-ask spreads managed by index managers and investment advisory services. Corporations and official institutions strategically balance portfolios with equities and loans, leveraging income holder strategies to achieve financial goals amidst evolving economic conditions and regulatory environments in the financial markets.
Industry Scope |
|
Report Coverage |
Details |
Page number |
167 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.15% |
Market growth 2024-2028 |
USD 8,372.3 billion |
Market structure |
USD Fragmented |
YoY growth 2023-2024(%) |
5.83 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 35% |
Key countries |
US, China, Germany, Japan, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., Aditya Birla Sun Life Mutual Fund, Adobe Inc., Bandhan Mutual Fund, Brookfield Business Partners LP, Franklin Templeton Asset Management India Pvt. Ltd, HDFC Ltd., Honeywell International Inc., ICICI Bank Ltd., International Business Machines Corp., JPMorgan Chase and Co., Kotak Mahindra Bank Ltd., Oracle Corp., Rockwell Automation Inc., State Bank of India, Synaptics Inc., UTI Mutual Fund, Wellington Management Co. LLP, WSP Global Inc., and Zebra Technologies Corp. |
Market dynamics |
Parent market analysis, Market forecasting growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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