How Has the Asset-Backed Securities Market Size Evolved in Recent Years?
The asset-backed securities market has seen considerable growth due to a variety of factors.
•The size of the asset-backed securities market has seen considerable expansion in the last few years. It is projected to advance from a value of $2429.05 billion in 2024, upper to $2597.65 billion in 2025, with a compound annual growth rate (CAGR) of 6.9%.
Factors contributing to this historical growth include the burgeoning popularity of securitization as a fiscal strategy, economic steadiness, a climate of low interest rates, growth of the mortgage market and the demand for housing, the evolution of credit rating agencies, and the widened accessibility of consumer credit markets.
What are the Market Size and Expected Growth Rates for the Asset-Backed Securities Market?
The asset-backed securities market is expected to maintain its strong growth trajectory in upcoming years.
• We can anticipate significant expansion in the asset-backed securities market in the coming years, forecasted to reach a market size of $3360.39 billion by 2029, with a compound annual growth rate (CAGR) of 6.6%.
Various factors are attributing to this predicted growth, including regulatory policies that boost securitization, the need for investment diversification, the influence of digital assets, and tokenization on ABS. Additionally, increased emphasis on environmental, social governance (esg) factors, changing demographics, and consumer behavior are other influencing factors. Key trends expected to shape this market in the forecast period include the financial innovation in structuring asset-backed securities, advances in financial modelling technology, adoption of blockchain for enhanced transparency and efficiency, deployment of machine learning and AI in ABS analytics, innovative risk-sharing structures in ABS, and use of real-time data in ABS valuations.
Which Key Drivers Are Propelling The Asset-Backed Securities Market's Growth?
The expansion of the asset-backed securities market is anticipated to be driven by growing real estate operations. This refers to properties comprising land and buildings or natural resources, spanning a variety of assets, such as residential, commercial, and industrial structures. Asset-backed securities serve crucial purposes in the real estate industry, facilitating the raising of funds, risk management and the enhancement of liquidity. As an illustration, Trading Economics, an American financial statistics portal, reported an increase in the US homeownership rate from 65.90% in Q4 of 2022 to 66% in Q1 of 2023. On top of that, Realtor, an American real estate enterprise, reported in December 2022 that there was a 54.7% increase in the number of homes available for sale compared to 2021. Consequently, the uptick in real estate operations is driving the asset-backed securities market's expansion.
What Are The Key Segments Within The Global Asset-Backed Securities Market?
The asset-backed securities market covered in this report is segmented –
1) By Type: Existing Assets, Future Cash Flow
2) By Application: Real Estate, Travel, Finance, Healthcare, Education
3) By Downstream Industry: Small And Medium Enterprises (SME), Large Enterprise
Subsegments:
1) By Existing Assets: Mortgage-Backed Securities (MBS), Auto Loan-Backed Securities (ABS), Credit Card Receivable-Backed Securities, Student Loan-Backed Securities, Equipment Lease-Backed Securities
2) By Future Cash Flow: Future Cash Flow From Loans Or Receivables, Future Cash Flow From Leases, Future Cash Flow From Revenue Streams, Structured Investment Vehicles (SIVs) Based On Projected Cash Flows
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How Are New Trends Impacting The Size Of The Asset-Backed Securities Market?
The emergence of asset-backed securities funds is an escalating trend in the asset-backed securities market. Principal firms active in this market are dedicated to creating inventive asset-backed securities services to maintain competition. For example, Morgan Stanley, a U.S. investment banking firm, unveiled a floating-rate global asset-backed securities fund in March 2023. This fund allows investors to hold a diversified portfolio of high-quality floating-rate asset-backed securities, like mortgage-backed securities (MBS), asset-backed commercial paper (ABCP), and other similar securities. The fund emphasizes high-grade assets with solid credit ratings, investing in a range of maturities, from short to long term. Other advantages of the fund encompass the investment aims and strategies, as well as the exposure to the risks relevant to asset-backed securities, such as credit, market, and liquidity risks. Furthermore, this fund provides an excellent opportunity for investors looking for exposure to a diversified portfolio of high-quality floating-rate asset-backed securities.
Who Are the Key Players in the Asset-Backed Securities Market?
Major companies operating in the asset-backed securities market include:
• Bank of America Corporation
• Citigroup Inc.
• Wells Fargo And Company
• BNP Paribas
• Morgan Stanley
• HSBC Group
• Goldman Sachs Group Inc.
• ING Group
• Capital One Financial Corporation
• UBS Group AG
• Barclays Plc.
• Deutsche Bank AG
• Societe Generale S.A.
• Mizuho Financial Group Inc.
• BlackRock Inc.
• Fidelity Investments
• Credit Suisse Group AG
• Manulife Financial Corporation
• State Street Corporation
• The Vanguard Group Inc.
• Franklin Templeton Investments
• Janus Henderson
• Aegon Asset Management
• WisdomTree Inc.
• Conning Holdings Limited
• Fitch Ratings Inc.
• Eaton Vance Corp.
What are the Regional Insights into the Asset-Backed Securities Market?
North America was the largest region in the asset-backed securities market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the asset-backed securities market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa
