Asset Backed Securities Market Size - By Issuer Types (Financial institutions, Captive finance companies, Specialty finance companies, Government-Sponsored Enterprises (GSEs)), Underlying Asset, Maturity, Structure, Issuance Type & Forecast, 2024 - 2032

Asset Backed Securities Market Size - By Issuer Types (Financial institutions, Captive finance companies, Specialty finance companies, Government-Sponsored Enterprises (GSEs)), Underlying Asset, Maturity, Structure, Issuance Type & Forecast, 2024 - 2032

Asset backed securities market size is anticipated to grow at over 8% CAGR between 2024 and 2032. Lately, investors are continually seeking multiple ways to diversify their portfolios while gaining exposure to a variety of asset classes, such as auto loans, credit card receivables, and student loans. This diversification is helping to mitigate risk and enhance returns, making asset backed securities (ABS) an attractive option for both institutional and retail investors. For instance, in March 2024, Legal & General Investment Management disclosed plans to launch two asset-backed securities funds to meet the growing demand from the U.K. defined benefit pension schemes.

Enhanced regulatory oversight has also increased investor confidence by ensuring better disclosure of underlying asset quality and risk factors. Technological advancements in data analytics and financial modeling have also improved the accuracy of credit risk assessments for enabling more precise pricing and risk management of ABS.

The overall industry is classified into underlying asset, maturity level, issuer types, structure, issuance type, and region.

Based on underlying asset, the market size from the credit card ABS segment will gain significant traction between 2024 and 2032 due to their strong performance characteristics and high demand from investors. These are typically backed by a pool of credit card receivables, which are generally considered stable and predictable cash flows. The diversification of underlying assets in credit card ABS also reduces risks and attracts a wide range of investors, adding to the segment growth.

Asset backed securities industry from the new issuance type segment is anticipated to witness significant CAGR from 2024 to 2032. As financial institutions and companies seek to diversify their funding sources and manage balance sheet risks, they are increasingly turning to ABS as a tool for raising capital. New issuances also offer fresh opportunities for investment in various asset classes, including auto loans, mortgages, and credit card receivables.

Asia Pacific asset backed securities market is anticipated to grow at a notable pace over 2024-2032 backed by the increasing demand for diversified investment options and evolving financial markets. The robust economic performance and the increasing sophistication of financial institutions have spurred greater interest as a means of managing risk and optimizing capital structures in the region.