Convertible Bond Market Projected to Reach $250 Billion by 2028, Says MarkWide Research
According to a new report published by MarkWide Research, titled “Convertible Bond Market,” the global convertible bond market is expected to reach a valuation of $250 billion by the year 2028, growing at a compound annual growth rate (CAGR) of 5.8% during the forecast period. The increasing investor interest in diversifying portfolios and the ongoing economic recovery are identified as key factors driving the growth of the convertible bond market.
Convertible bonds, also known as hybrid securities, have garnered attention as a popular investment option due to their unique characteristics that combine features of both bonds and equities. These bonds provide investors the opportunity to benefit from potential equity appreciation while offering the security of fixed income. The convertible bond market has witnessed significant expansion in recent years, with companies increasingly utilizing this financial instrument to raise capital for growth initiatives and fund innovation projects.
Rising Investor Demand and Portfolio Diversification Fueling Market Growth
The report highlights that a growing number of institutional and retail investors are recognizing the benefits of including convertible bonds in their investment portfolios. The ability to participate in potential equity upside while still having a fixed income component during uncertain market conditions is a compelling proposition. This has led to heightened demand for convertible bonds across various sectors, including technology, healthcare, and consumer goods.
Economic Recovery and Favorable Market Conditions
The post-pandemic economic recovery is expected to play a pivotal role in the growth of the convertible bond market. As economies rebound and businesses regain stability, the appetite for capital-raising instruments like convertible bonds is likely to increase. Furthermore, the prevailing low interest rate environment adds to the attractiveness of these bonds, as investors seek higher yields compared to traditional fixed-income options.
Key Market Insights
The research report provides valuable insights into the convertible bond market’s trends and dynamics. It analyses the market based on various factors, such as type, maturity, industry vertical, and geography. Moreover, the study offers a comprehensive overview of the competitive landscape, highlighting the strategies adopted by key market players to gain a competitive edge.
Regional Outlook
The report assesses the convertible bond market across key regions, including North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. North America is anticipated to dominate the market share, attributed to the presence of well-established financial markets and a growing number of technology-driven startups opting for convertible bonds to fuel expansion.
Future Prospects
As the global economy continues its recovery journey, the convertible bond market is poised for sustained growth. The hybrid nature of convertible bonds positions them as an attractive investment option for both risk-averse and growth-oriented investors. Market participants are closely monitoring regulatory developments and issuer strategies to capitalize on emerging opportunities.
In conclusion, the convertible bond market is on a trajectory of expansion, driven by increased investor interest, portfolio diversification, and the ongoing economic recovery. With a projected valuation of $250 billion by 2028 and a CAGR of 5.8%, the convertible bond market presents promising avenues for investors seeking innovative ways to balance risk and return in their portfolios.