Fixed Income and the Growing Bond Funds Market
At $36 trillion, the U.S. fixed income marketplace was over twice the size of the market capitalization of U.S. stocks as of December 2010.* Over the years, the size of the bond funds market has grown in both size and complexity, and investors today have a diversity of choices when it comes to structuring their fixed income allocations.
*Sources: Securities Industry and Financial Markets Association and World Federation of Exchanges as of 12/31/2010.
The bond market can broadly be divided into the following sectors
- U.S. government securities (Treasuries and TIPS)
- Agency bonds
- Municipal bonds
- Securitized bonds (asset- and mortgage-backed securities)
- Corporate bonds (investment grade and high yield)
- International bonds (developed-country sovereign bonds and emerging market debt and international inflation-linked bonds)