The changing makeup of the Global Market Portfolio
In 2025, the Global Market Portfolio (GMP) AUM reached USD 191 trillion. The weight of alternatives in the portfolio climbed, while the equity weight fell.
Insights into investor preferences
As the sum of all holdings from the collective decisions of investors, issuers, suppliers, and demanders of capital, the GMP can be seen as a de facto proxy for the investable opportunity available to all investors globally. It also represents the positioning of investors in aggregate, and reveals insights into their attitudes and preferences. The GMP could be considered as a natural benchmark for investors’ strategic asset allocations—much more diversified and theoretically sound than the iconic 60/40 equity–bond benchmark.
Taking advantage of higher expected returns
After very favorable market conditions in 2024, the market value of the GMP had reached an all-time high of roughly USD 191 trillion as of March 2025—an increase of 240% from 2005 (Figure 1). This is true even though the global economy headed into 2025 with several headwinds; US tariffs and increasing geopolitical risks led to uncertainties, which have started to slow down economic activity. Global inflation may fall, but stagflation remains a risk. Meanwhile, innovation and major investments in AI, defense, and healthcare have significantly shaped the investment landscape in recent years.
As always, investors want to get the most out of their portfolios. Questions related to which asset classes should be considered for the long term, what are their respective risks and merits, and how they can be combined efficiently continue to be top of mind.
Based on our proprietary capital market assumptions, the medium- to long-term expected return for the GMP is 5.9% on a USD basis. This largely reflects the higher interest rate environment we have been in since the end of 2021, and the positive expected returns from equity investments.
Figure 1: The GMP has swelled with increasing demand and higher asset prices
Particularly interesting is the evolution of the weighting of macro asset classes (Figure 2). At the peak of the Dot Com bubble in 2000, the total equity weight had reached an impressive 60%. It has steadily and visibly declined since then, reaching 50% in 2007, and oscillating between 35% and 45% since. In March 2025, the total equity weight was close to 44%. Some of the relative declines could be attributed to the development of other alternative asset classes as well as the significant issuance of fixed income securities by governments and corporates.
During bear markets and major corrections (2008, 2011, and March 2020), the equity weighting was negatively affected by lower equity prices, and reached the low end of this range. Conversely, and unsurprisingly given their more defensive characteristics, bonds have tended to increase in weight during bear markets, reaching up to 55% during the height of the global financial crisis in December 2008, the eurozone crisis of 2011, and the pandemic in March 2020. As of March 2025, global bonds represented 42% of the GMP, close to the low of the range.
The weighting of alternative asset classes has been steadily increasing, more than doubling in weight to reach 14% in 2025 from 6% in 2000. This notable progress can be attributed to increased investor confidence, along with the maturation of private equity and private credit as industries and the robust performance of specific assets. Most notably, gold has experienced an elevenfold increase in price since 2000.
Details on Q1 composition and asset class performance
In the GMP, equities currently represent the largest asset class, despite some decrease in market cap in Q1 2025 and the decline in the overall weight of equities in the GMP. Sovereign and government-related bonds are the second-largest asset class, with robust issuance driving an increase in bond market cap (Figure 3).
Equity market cap declined in Q1 2025
US tariffs, rising geopolitical risks, and ongoing inflation have dampened market sentiment. After a strong second half of 2024 with equity market cap exceeding USD 85.2 billion, global equity markets saw sharp volatility in early 2025. At the end of Q1 2025, global equities were valued at USD 83.4 trillion, down 2.2% from Q4 2024 and up slightly 2.9% from June 2024.
The first quarter of 2025 also saw significant sectoral and regional divergences, with non-US markets driving much of the performance in global equities. Eurozone equities surged in the quarter following Germany’s announcement on pro-growth fiscal policies. Emerging European markets benefited from the region's improved outlook, while Chinese equities rose on optimism about AI and new consumption-boosting stimulus measures.
Meanwhile, US equities faced challenges amid notable declines in the information technology sector, attributed to the impact of DeepSeek disruption. The consumer discretionary sector also weakened, reflecting investor concerns regarding trade tariffs and the Department of Governmental Employment (DOGE)’s proposed public sector job reductions.
Currently, the global equity market value is more than four times its level during the global financial crisis in 2008, and almost 1.5 times its level during the COVID-19 period (Q4 2020).
The equity weighting of 43.6% for Q1 2025 marked a notable decrease from 45.3% in Q4 2024 (Figure 2).
Lower issuance detracted from equity market cap in Q1 2025
New issuance accounted for 0.7% of the total equity market capitalization in 2024, marking the second-lowest percentage since 2000. The 2024 trend is similar to those observed in 2022 and 2023 (Figures 4 and 5).
Global equity capital markets achieved a three-year peak of USD 611.3 billion in 2024, primarily driven by follow-on and convertible offerings. In Q4 2024, issuance reached USD 188.4 billion, representing a 47.4% increase from Q3, and marking the highest quarterly total since Q4 2021. Subsequently, activity declined to USD 154 billion in Q1 2025, an 18.2% decrease from Q4, but a 7.7% rise compared to Q1 2024.
In Q1 2025, global initial public offerings (IPOs) rose by 21.8% year-on-year to reach USD 26 billion, making it the strongest opening quarter for global IPOs since 2022. US IPOs contributed USD 7.7 billion, marking a four-year high, while China-domiciled IPOs grew by 13% to USD 3.9 billion compared to Q1 2024.
The US accounted for a leading 35% share of overall global equity capital market issuance; however, its proceeds declined by 4.2% relative to Q1 2024. Meanwhile, equity issuances in China more than tripled year-on-year in Q1 2025, reaching USD 30.1 billion.
Global follow-on offerings saw a 7.1% year-over-year increase in Q1. By contrast, convertible offerings declined by 2.9% to USD 22.1 billion, the lowest first-quarter level since 2022. The technology, financial, and healthcare sectors collectively constituted over 60% of total convertible issuance during this period.1
Bond market cap rose on hefty public supply
On the bond side, by March 2025, the market value of public debt securities rose 4.8% from December 2024, reaching USD 80.9 trillion. Total government bond market cap was USD 40.3 trillion, or 21.1% of the total. This marked an increase of 4.5% for Q1 2025. Meanwhile, investment grade (IG) credit accounted for 9.1%, or USD 17.5 trillion. This was up from USD 16.8 trillion at the end of 2024 .
Global bond markets remained resilient in 2024 amid geopolitical risks and high interest rates, driven by continued sovereign debt issuance to refinance obligations and fund deficits. Debt issuance hit a record USD 10.4 trillion in 2024, up 21.5% from 2023, with strong activity across sectors. New issuance accounted for 13.5% of the total bond market capitalization in 2024, marking the highest level since 2009.
The first quarter of 2025 also saw USD 3.2 trillion in bond issuance—up 8.7% from Q1 2024. That supply was led by agency, supranational, and sovereign offerings totaling USD 1.2 trillion, a 24% increase from Q1 2024 (Figures 6 and 7).
Investment-grade credit issuance for Q1 2025 was USD 1.5 trillion, down 2.6% from Q1 2024, marking a slow start for corporate debt. High-yield issuance also fell 3% to USD 126 billion. Financial institutions, government entities, and agencies made up 77% of total issuances. Technology, consumer staples, and materials sectors grew robustly, while media, healthcare, and retail saw declines over 40% from Q1 2024 level.2
The US accounted for over 25% of total issuance value in Q1 2025. Emerging market corporate issuance also rose robustly by 17% from Q1 2024 to USD 115 billion, led by companies in India, Brazil, Saudi Arabia, and Malaysia.
Agency, supranational and sovereign issuances totaled USD 1.7 trillion, have been broadly in line with the levels seen in H1 2023 but were slightly lower than some periods in the previous three years. Federal Credit Agency debt increased 30% from a year ago to USD 110 billion, but was less than half of the level in H1 2020.
Issuance in investment grade credit totaled USD 2.8 trillion during H1 2024, up 14.2% compared to a year ago, marking the strongest opening period for global investment-grade corporate debt since 2020. We observed double-digit growth in sectors such as healthcare, retail and consumer staples. This is also the strongest first half since H1 2020, driven by increases in all issue types.
Global high yield debt activity also rose by 73% from H1 2023 to three-year high of USD 266 billion, while mortgage-backed securities totaled USD 278 billion, a 70.5% increase from H1 2023.
Regionally, US corporate issuers accounted for more than 20% of global market activity in 2023. Meanwhile, emerging market (EM) debt totaled USD 268 billion in 2023, a 12% increase from 2022, with more than half of the activity coming from corporates in India, Brazil, Thailand and Malaysia.
As of Q2 2024, EM countries were responsible for almost USD 170 billion debt issuance, up 13% from H1 2023. Corporate debt issuers from India, Saudi Arabia, Brazil and the United Arab Emirates accounted for 51% of emerging markets activity during the first half. Continued property challenges in China had likely dragged credit conditions there and slowed its economic recovery.
Alternatives market cap rose, with gold growth offsetting declines in PE
Private debt continued its robust performance in 2024. As of the end of 2024, global private debt totaled USD 1.8 trillion, up 3.1% from 2023. Fundraising recorded USD 197.1 billion, which was 20% lower than 2023, but in line with the 2019 level (Figure 8).3
Figure 8: Fundraising has slowed
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Direct lending continues to be the preferred strategy within private debt, accounting for 60.7% of the capital raised, followed by real estate debt (10.1%), multi-strategy (9.8%), and credit special situations (9.6%). Private equity is currently estimated to represent 1.0% of the GMP, compared to only 0.3% in 2006.
Global private equity markets are still under pressure from market conditions. Their estimated total as of end-2024 was around USD 9.7 trillion, just a 0.4% increase from 2023. This represents the slowest growth rate since 2002. Private equity currently accounts for an estimated 5.0% of GMP, a decrease from the peak of 5.9% in 2022, but higher than levels observed before the COVID-19 pandemic.
As of the end of March 2025, gold accounted for 4.5% of the GMP, compared to the 3.9% level of 2024. Its total value went up by 19.0% within the first three months of this year, to USD 8.7 trillion, which is its all-time high. Gold’s current weighting now is much higher compared to the 3.8% level seen in 2011–12, when central banks were very active in quantitative easing and asset purchase programs in the aftermath of the global financial crisis and the beginning of the eurozone crisis.
Real estate’s market value totaled USD 6.8 billion as of end-March 2025, remaining 15% lower than its pre-pandemic December 2019 level. Real estate was estimated to account for 3.5% of the GMP as of end-March 2025, which is the second lowest proportion since early 2000s (after December 2024 of 3.5%).