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The next generation bond market

Fixed income markets have undergone significant structural change since the 2008 financial crisis. These seismic shifts are forcing investors to adapt to a new market paradigm that will challenge not only how they trade fixed income, but what types of products they use to build bond portfolios and manage risk. In this paper, authors examine the evolution of the bond market through three interconnected lenses: the liquidity environment, market structure and product preferences. All three are changing in the post-crisis era with implications for the shape of the future bond market and investors. Similar to what took place in equities, they believe the coming years will be marked by a major transformation in fixed income. In this new world, investors may have to think differently about how to build portfolios, how to trade and what to trade