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INFORMATION AND BASIC CRITERIA

Fixed Income markets are also known as bond markets and involve the sale and purchase of a wide range of Fixed Income assets on the various markets.

These products are not standardised and this is why the various markets, official or otherwise, comprise a greater number of Fixed Income issues than would be found in the equity markets.

There are around 3,000 issues or listed references on the AIAF.

Bond markets tend to be viewed as wholesale markets given the high volume of transactions carried out. Recently, however, these markets have been opening up to retail investors and this trend looks set to continue over the coming years. In spite of this, the number of retail investors in Europe is still modest in comparison with the United States and represents around 5% of direct investment in Fixed Income markets. This percentage would be higher if we were to include investment in Fixed Income by insurance companies, investment funds and pension funds on behalf of their unit holders.

The North American bond markets have traditionally dominated the world stage. However, this is changing as the European markets are gaining in popularity with sovereign bonds accounting for 60% of the total and corporate bonds 40%. The opposite is true in the US as the volume of corporate debt outweighs public debt.

Direct retail bondholders’ stakes vary greatly from country to country in Europe. In Italy, retail bondholders account for 20% or more of total financial stakes. In Germany this is 10-15% while in other countries this tends to be under 5%, with the UK recording the lowest percentage (only 1.5%).

In the US, retail investor participation in the bond market stands at around 6.9% of all financial stakes. US retail investors participate mostly in the municipal and local government bond markets (quasi-sovereign bonds) with a 20-25% share of the total market.

 

 

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