Global ABS Market Outlook

the global abs (asset-backed securities) market is expected to continue to grow over the 2018 to 2032 outlook period, though at a slower pace than the market has experienced over the past decade. as interest rates and market conditions tighten in many developed markets, investors may find abs more attractive than traditional fixed income investments. the spread of knowledge and acceptance of asset-backed investments will continue to serve as a major driver of this market in the coming years. structurally, the global abs market is expected to remain stable over the 2018 to 2032 outlook period, with most activity taking place in the united states, europe, and japan. regulations have played an important role in the growth and development of the abs market, and parties have been increasingly pushing for international collaboration and harmonization of regulatory regimes to further facilitate the market. going forward, regulations and central bank policies are expected to remain relatively static or loosening in many developed markets, likely limiting downside risk to performance. the abs market offers investors access to a wide variety of securities and the potential for attractive returns. in addition, innovations in the areas of securitized instruments, such as multiply-sliced clos, are gradually making it possible to diversify risk among different classes of asset-backed securities. this shift towards greater diversification of risk should help provide stability to the market in the medium-term. going forward, the global abs market will continue to be driven by the availability of attractive investments and by its continued development and integration into mainstream finance. large institutional players such as banks, hedge funds and private equity firms are expected to continue to dominate the market, though the entrance of smaller players and the growth of asset-backed debt origination should limit the market’s reliance on this segment. in addition, the development of new asset-backed markets (such as north american abs) will continue to shape the overall landscape of our global abs market. overall, the global abs market is expected to remain stable and continue to grow over the 2018 to 2032 outlook period. regulatory regimes and the ability to diversify risk among different asset classes are likely to play a key role in this market’s prospects going forward, while new markets and instruments will shape the future of this evolving but increasingly important asset class.