Europe Fixed Income Assets Management Industry Market Size

Europe Fixed Income Assets Management Market Analysis

The Europe Fixed Income Assets Management Industry is expected to register a CAGR of greater than 2% during the forecast period(2024-2029).

Portfolio allocations to fixed income are primarily driven by investors' expectations of returns, followed by volatility concerns and liquidity requirements. Within core European fixed incomes, investment-grade corporate bonds are primarily used to deliver returns. In contrast, lower-yielding sovereign debt includes a more operative function of liquidity and duration matching. Non-core fixed-income classes such as global high yield and emerging market debt are expected to deliver the strongest overall performance. Conversely, reflecting the return expectations noted above, global high yield and emerging market debt are sought-after sources of total return and yield generation.

On average, European institutions are allocating 56% of their portfolios to fixed income and twice their equity allocation. Two-thirds of European institutions manage their fixed income on a wholly active basis. However, there is a growing minority looking to manage core assets such as domestic government bonds passively, primarily using index funds. Half the European institutions include a fixed-income portfolio of five to ten years.

The COVID-19 pandemic highlighted the need to continue technological modernization at every investment management delivery chain level to deliver the best customer outcomes. The operating model is also increasingly focused on the importance of the Diversity and Inclusion (D&I) agenda.