2019 was the year where everything went right for fixed income in the United States. The Federal Reserve (Fed) reverted to easing mode, government bond yields collapsed, credit spreads narrowed and overseas demand for US assets was insatiable. For 2020, it is a little more nuanced. Government bond yields are almost half what they were in late 2018. Credit spreads - across both high yield and investment-grade - are approaching multi-year lows.
The increased global stock of negative-yielding debt, which peaked at $17 trillion in 2019, has driven the disconnect between valuations and fundamentals.
Key Market Trends
Distribution of US Fixed Income Assets - By Investment Style
The concept of index investing in fixed income is not as well established as in equities in United States. Most US fixed income assets (74%) are not managed by asset managers including those held by individuals, insurance companies, official institutions, etc. The remainder is managed in the sense that active managers, index managers, hedge funds, and others manage these assets with the objective of either tracking or outperforming an index. The below infographic showcases approximately $40 trillion US fixed income market broken down by investment category.
United States Treasury Securities Performance Insights
A number of features contribute to the U.S. Treasury market’s role as a benchmark. Treasuries are backed by the full faith and credit of the U.S. government and are therefore considered to be free of default risk. The creditworthiness and supply of Treasury securities have resulted in a highly liquid round-the-clock secondary market with high levels of trading activity and narrow bid-ask spreads. An infographic presenting the market yield on 10-year Treasury securities over the years is presented below.
Competitive Landscape
The report includes an overview of asset managers operating across the United States. We wish to present detailed profiling of a few major companies which cover their product offerings, regulations governing them, their headquarters and financial performance. Currently, some of the major players dominating the market are listed below.
Additional Benefits:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
This product will be delivered within 2 business days.
Table of Contents
Methodology
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