Asset-backed Securities Market Overview:
Asset-backed Securities Market Size was estimated at 5,867.87 (USD Billion) in 2022. The Asset-backed Securities Market is expected to grow from 6,189.43 (USD Billion) in 2023 to 10,000.0 (USD Billion) by 2032. The Asset-backed Securities Market CAGR (growth rate) is expected to be around 5.48% during the forecast period (2024 - 2032).
Key Asset-backed Securities Market Trends Highlighted
The escalating issuance of ABS by banks and other financial institutions, together with the expanding appeal of ABS among institutional investors, are significant factors propelling the market.
New asset classes that ABS can enter and creative ABS structures that can be created are growth opportunities.
For example, issuing ABS backed by environmentally friendly assets, like green bonds, is becoming more popular. The use of ABS to finance social initiatives, such infrastructure and affordable housing, has been on the rise recently.
Furthermore, there is a growing trend in the application of technology to enhance the ABS market's transparency and efficiency.
Other obstacles facing the ABS market are changes in regulations, worries about credit risk, and the possible effects of rising interest rates. The ABS market is anticipated to sustain its growth trajectory and its position as a crucial source of finance for governments and enterprises worldwide by resolving these obstacles and seizing the opportunities that present themselves.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Asset-backed Securities Market Drivers
Increasing Demand for Alternative Investment Opportunities
Featuring the growing interest in alternative investment choices, the Asset-backed Securities Market offers new opportunities to potential investors. In today's market, when the investment portfolio produces less profit than it used to, people are becoming more conscious of novel approaches to achieve financial outcomes.
Asset-backed Securities, “securities backed by a pool of assets such as loans, leases and credit card receivables”, seem to lend themselves to the goal perfectly by offering investors secure and stable profits.
The increased investment security offered by these securities, with their focus on low-risk assets like mortgages, auto loans, and credit card receivables, makes them a perfect target for demand increase among institutional and private investors.
Given the current dynamics of the market, the Asset-backed Securities will continue driving market expansion.
Expansion of Credit Markets
The expansion of credit markets is a major trend propelling the development of the Asset-backed Securities Market. As credit becomes increasingly more available, the amount of securities backed by assets issued rises.
The trend is likely to continue progressing in the future since the levels of credit demand are high. In addition, the increase in credit markets helps asset banking of securities based on consumer credit.
For example, the number of papers issued during the period increased with respect to the Consumer Loan asset class.
Technological Advancements
Technological advancements have played a significant role in the growth of the Asset-backed Securities Market. The development of new technologies, such as data analytics and machine learning, has enabled investors better to assess the risks and rewards of Asset-backed Securities.
This has led to increased transparency and efficiency in the market, making it more attractive to investors. Technological advancements have also made it easier for issuers to structure and sell Asset-backed Securities, which has contributed to the growth of the market.
Asset-backed Securities Market Segment Insights:
Asset-backed Securities Market Asset Class Insights
The Global Asset-backed Securities (ABS) market is segmented into various asset classes, each with its own unique characteristics and growth dynamics. Key asset classes in the ABS market include Residential Mortgages.
Residential mortgage-backed securities (RMBS) represent the largest asset class within the ABS market, accounting for a significant portion of the overall market value.
RMBS are backed by pools of residential mortgages, providing investors with exposure to the housing market. The growth of the RMBS market is closely tied to the performance of the housing sector, with factors such as interest rates, economic conditions, and government policies influencing market dynamics.
Commercial mortgage-backed securities (CMBS) are backed by pools of commercial mortgages, such as those secured by office buildings, retail properties, and industrial facilities.
The CMBS market has experienced steady growth in recent years, driven by factors such as low interest rates and increased demand for commercial real estate. CMBS offers investors a way to gain exposure to the commercial real estate market while diversifying their portfolios.
Auto loan-backed securities (ABS) are backed by pools of auto loans, providing investors with exposure to the automotive industry.
The growth of the auto loan ABS market is influenced by factors such as consumer creditworthiness, vehicle sales, and economic conditions. Auto loan ABS offers investors a way to gain exposure to the automotive sector while diversifying their portfolios.
Credit card receivable-backed securities (ABS) are backed by pools of credit card receivables, providing investors with exposure to the consumer credit market.
The growth of the credit card ABS market is influenced by factors such as consumer spending, credit card usage, and economic conditions. Credit card ABS offers investors a way to gain exposure to the consumer credit sector while diversifying their portfolios.
Student loan-backed securities (ABS) are backed by pools of student loans, providing investors with exposure to the education sector. The growth of the student loan ABS market is influenced by factors such as government policies, student enrollment, and economic conditions.
This growth is attributed to factors such as increasing demand for alternative investment options, growing securitization of various asset classes, and a favorable regulatory environment.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Asset-backed Securities Market Security Structure Insights
The Asset-backed Securities Market segmentation by Security Structure into Pass-Through Securities, Collateralized Mortgage Obligations (CMOs), Collateralized Debt Obligations (CDOs), Structured Investment Vehicles (SIVs), and Asset-Backed Commercial Paper (ABCP) provides crucial insights into the market dynamics.
Pass-through securities, representing the largest segment, accounted for over 40% of the market revenue in 2023, driven by their simplicity and transparency. CMOs, designed to tranche cash flows from mortgage pools, followed closely, capturing a significant market share.
CDOs, which pool and tranche cash flows from various asset classes, have witnessed steady growth due to their ability to diversify risk. SIVs, once a major segment, declined post-2008 but are expected to regain prominence with regulatory changes.
ABCP, short-term debt obligations backed by receivables, contributes to market liquidity and growth. The Asset-backed Securities Market is projected to continue expanding in the coming years, presenting numerous opportunities for stakeholders in the industry.
Asset-backed Securities Market Credit Rating Insights
The credit rating segment plays a crucial role in the Asset-backed Securities Market, as it directly impacts the risk assessment and investment decisions of market participants. Among the various credit ratings, 'AAA' denotes the highest level of creditworthiness, while 'D' represents the lowest.
As of 2023, the 'AAA' segment dominated the market, accounting for a significant portion of the Asset-backed Securities Market revenue. This dominance is driven by the high demand for securities with low-risk profiles from institutional investors and risk-averse individuals.
However, the 'AA' and 'A' segments are also expected to witness steady growth in the coming years, driven by the increasing issuance of Asset-backed Securities with investment-grade ratings.
In contrast, the lower-rated segments, such as 'CCC', 'CC', and 'C', are likely to experience slower growth due to their higher risk profiles and limited investor appetite.
Asset-backed Securities Market Maturity Insights
The Asset-backed Securities Market is segmented by Maturity into Short-Term (less than 1 year), Medium-Term (1 to 5 years), and Long-Term (more than 5 years). Among these, the Medium-Term segment held the largest market share in 2023, accounting for around 45% of the Asset-backed Securities Market revenue.
The Long-Term segment is expected to grow at the highest CAGR of 6.2% during the forecast period 2023-2032. This growth is attributed to the increasing demand for long-term financing by various industries, including real estate, automotive, and infrastructure.
The Short-Term segment is also expected to witness steady growth, driven by the need for short-term liquidity and working capital management.
Asset-backed Securities Market Regional Insights
The regional segmentation of the Asset-backed Securities Market offers valuable insights into the market's geographical distribution and growth potential.
North America is expected to dominate the market in 2024 with a revenue of USD 2,700 billion, driven by a robust financial services industry and high demand for structured finance products.
Europe follows closely with a revenue of USD 2,200 billion, supported by favorable regulatory frameworks and a large pool of institutional investors.
Asia-Pacific (APAC) is projected to witness significant growth, with China and India emerging as key markets. The region is expected to reach a revenue of USD 2,000 billion by 2024, driven by rapid urbanization, growing consumer spending, and government initiatives to promote infrastructure development.
South America and MEA are expected to contribute a combined revenue of USD 500 billion, with Brazil, Argentina, and Saudi Arabia being prominent markets.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Asset-backed Securities Market Key Players and Competitive Insights:
Major players in the Asset-backed Securities Market are continuously striving to gain a competitive edge by investing heavily in research and development, expanding their product portfolios, and adopting innovative technologies.
The leading asset-backed securities market players are focusing on developing new products and solutions that cater to the evolving needs of their customers while exploring strategic partnerships and acquisitions to strengthen their market position.
The Asset-backed Securities Market development is also being driven by the increasing adoption of digital technologies, which enable more efficient and transparent issuance and trading of Asset-backed Securities.
This competitive landscape is expected to remain dynamic in the coming years as players continue to innovate and adapt to the evolving market environment.
A leading player in the asset-backed securities market is Goldman Sachs, which is known for its expertise in underwriting and distributing a wide range of asset-backed securities. The company has a global presence and strong relationships with institutional investors, which enables it to place large volumes of securities in the market efficiently.
Goldman Sachs is also actively involved in developing innovative structured products and solutions that meet the specific needs of its clients.
Another major competitor in the Asset-backed Securities Market is JPMorgan Chase, which has a long-standing history in the industry and a strong track record in securitizing various types of assets. The company's extensive distribution network and deep understanding of the capital markets allow it to effectively execute large and complex transactions.
JPMorgan Chase is also known for its commitment to sustainability and has been actively involved in developing green and social Asset-backed Securities to meet the growing demand for ESG-compliant investments.
Key Companies in the Asset-backed Securities Market Include:
- Credit Suisse
- Citigroup
- Wells Fargo
- Royal Bank of Canada
- Barclays
- Deutsche Bank
- JPMorgan Chase
- Morgan Stanley
- BNP Paribas
- Société Générale
- UBS
- Goldman Sachs
- Bank of America Merrill Lynch
- ING
- HSBC
Asset-backed Securities Industry Developments
The Asset-backed Securities (ABS) market has witnessed steady growth in recent years, driven by factors such as increasing demand for alternative investment options, low interest rates, and government support.
Notable developments in the ABS market include the expansion of non-traditional ABS asset classes, such as auto loans, student loans, and trade receivables. Technological advancements, such as blockchain and artificial intelligence, are also transforming the industry by enhancing transparency, efficiency, and risk management.
Furthermore, regulatory changes aimed at mitigating risks and promoting market stability continue to shape the landscape of the ABS market.
Asset-backed Securities Market Segmentation Insights
Asset-backed Securities Market Asset Class Outlook
- Residential Mortgages
- Commercial Mortgages
- Auto Loans
- Credit Card Receivables
- Student Loans
Asset-backed Securities Market Security Structure Outlook
- Pass-Through Securities
- Collateralized Mortgage Obligations (CMOs)
- Collateralized Debt Obligations (CDOs)
- Structured Investment Vehicles (SIVs)
- Asset-Backed Commercial Paper (ABCP)
Asset-backed Securities Market Credit Rating Outlook
- AAA
- AA
- A
- BBB
- BB
- B
- CCC
- CC
- C
- D
Asset-backed Securities Market Maturity Outlook
- Short-Term (less than 1 year)
- Medium-Term (1 to 5 years)
- Long-Term (more than 5 years)
Asset-backed Securities Market Regional Outlook
- North America
- Europe
- South America
- Asia-Pacific
- Middle East and Africa
| Report Attribute/Metric |
Details |
| Market Size 2022 |
5867.87 (USD Billion) |
| Market Size 2023 |
6189.43 (USD Billion) |
| Market Size 2032 |
10000.0 (USD Billion) |
| Compound Annual Growth Rate (CAGR) |
5.48% (2024 - 2032) |
| Report Coverage |
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Base Year |
2023 |
| Market Forecast Period |
2024 - 2032 |
| Historical Data |
2019 - 2023 |
| Market Forecast Units |
USD Billion |
| Key Companies Profiled |
Credit Suisse, Citigroup, Wells Fargo, Royal Bank of Canada, Barclays, Deutsche Bank, JPMorgan Chase, Morgan Stanley, BNP Paribas, Société Générale, UBS, Goldman Sachs, Bank of America Merrill Lynch, ING, HSBC |
| Segments Covered |
Asset Class, Security Structure, Credit Rating, Maturity, Regional |
| Key Market Opportunities |
Expanding corporate sector ABS issuance.Growing consumer ABS origination.Increased investor demand for yield.Technological advancements in ABS issuance and servicing.Regulatory supports for ABS issuance and investment. |
| Key Market Dynamics |
Declining interest rates Growth in nonbank lending. Increasing regulatory focus Technological advancements.Rise in securitization of alternative assets. |
| Countries Covered |
North America, Europe, APAC, South America, MEA |
Frequently Asked Questions (FAQ) :
The Asset-backed Securities Market is expected to reach USD 10,000.0 billion by 2032, growing at a CAGR of 5.48% from 2024 to 2032.
The key regions in the Asset-backed Securities Market are North America, Europe, Asia-Pacific, and the Rest of the World. North America is the largest region, accounting for over 40% of the market share.
The key competitors in the Asset-backed Securities Market include BlackRock, PIMCO, Goldman Sachs, JPMorgan Chase, and Citigroup.
The key applications of Asset-backed Securities include securitization of mortgages, auto loans, credit card receivables, and other types of financial assets.
The growth drivers of the Asset-backed Securities Market include increasing demand for alternative investment options, rising issuance of Asset-backed Securities by banks and other financial institutions, and growing demand for securitized products from institutional investors.
The challenges faced by the Asset-backed Securities Market include regulatory changes, interest rate fluctuations, and credit risk associated with the underlying assets.
The key trends in the Asset-backed Securities Market include the growing use of technology in the issuance and trading of Asset-backed Securities, the increasing popularity of ESG-linked Asset-backed Securities, and the growing demand for Asset-backed Securities from emerging markets.
The Asset-backed Securities Market is expected to Register a CAGR of 5.48% from 2024 to 2032.
The key opportunities in the Asset-backed Securities Market include the growing demand for alternative investment options, the rising issuance of Asset-backed Securities by banks and other financial institutions, and the growing demand for securitized products from institutional investors.
The key challenges in the Asset-backed Securities Market include regulatory changes, interest rate fluctuations, and credit risk associated with the underlying assets.
