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10 Facts About the Capital Markets

Capital markets recognize and drive capital to the best ideas and enterprises. Coupled with the free flow of capital, innovation is an integral component to a country for supporting job creation, economic development and prosperity. Markets facilitate the transfer of funds from those who seek a return on their assets to those who need capital and credit to expand.

Clients benefiting from healthy capital markets include not just individual investors but also institutional investors, governments and corporations. Capital, raised through equity and debt, can be used to grow businesses, finance investments in new plant, equipment and technology and fund infrastructure projects. This creates jobs and flows money into the economy. Additionally, individuals and businesses can invest in securities to generate wealth.

In 2019, the securities industry raised $2.1 trillion of capital for businesses through corporate debt and equity issuance activity in the United States. Results were mixed across asset classes, with equities +2.9% and fixed income -14.6%, which was driven by a 56.7% decline in non-agency MBS.

Here are 10 more facts about the capital markets from market activity in 2019:

Fixed Income Markets

  1. U.S. fixed income markets are 39% ($41 trillion) of the $106 trillion global securities outstanding, or 1.9x the next largest market, the EU (ex-U.K.)
  2. U.S. fixed income outstanding breakout: 37.1% U.S. Treasuries; 22.9% mortgage-backed securities; 21.3% corporate bonds; 8.6% municipal bonds; 4.1% agency debt; & 3.7% asset-backed securities
  3. The U.S. issued $8.2 trillion in fixed income securities, +10.0% Y/Y

Equity Markets

  1. U.S. equity markets are 39% ($37 trillion) of the $95 trillion in global equity market cap, or 3.9x the next largest market, the EU (ex-U.K.)
  2. The U.S. issued $228 billion in equities, +2.9% Y/Y but still down 24.9% from the 2014 peak
  3. U.S. IPOs totaled 49 billion, -2.1% Y/Y and down 47.8% from the 2014 peak

Retirement Assets & Savings

  1. There are $39 trillion of U.S. retirement assets (+10.8% Y/Y), broken out by: 28.2% IRAs; 28.1% private retirement plans; 24.1% state and local government pensions; 10.6% federal government pensions; and 8.9% insurance company annuities
  2. U.S. household liquid financial assets were $50 trillion (+16.9% Y/Y), broken out by: 41.6% equities; 22.9% deposits; 19.8% mutual funds; 5.4% U.S. Treasuries; 3.8% municipal bonds; 4.5% money market funds; and 2.0% corporate bonds

Securities Industry

  1. There are 3.5 thousand broker-dealers in the U.S., a 2.5% Y/Y decline, down 31.1% since 2005
  2. There are  971 thousand securities industry employees in the U.S., up 0.9% Y/Y, and up 14.7% since 2005

More data and statistics are available in the SIFMA Capital Markets Fact Book, an annual reference containing comprehensive data on the capital markets, investor participation, savings and investment, and securities industry.

Katie Kolchin is a Chartered Financial Analyst and head of SIFMA Research. Justyna Podziemska is an Assistant Vice President for SIFMA Research.

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