Money Mountains

SPECIAL REPORT | March 24th 2025 | GLOBAL FINANCE

The Trillions Reshaping Global Asset Classes

Cash is merely king. Real estate is emperor.

For those who see money as merely pieces of paper or digits on a screen, consider this: the global real estate market, worth $217 trillion in 2015, exceeds the value of all gold ever mined by a factor of 36. This colossus represents approximately 60% of mainstream global assets, with residential property claiming the lion's share at $162 trillion—a figure underpinned by the ownership stakes of some 2.5 billion households worldwide.

The property empire is greening its foundations. As a significant carbon emitter, the sector faces mounting pressure to decarbonise. Best practices now begin with rigorous data collection and establishing science-based targets aligned with global emission pathways. What was once considered virtuous window-dressing has become essential business strategy. In an age where capital flows increasingly follow environmental credentials, the message to property magnates is clear: adapt or depreciate.

Fixed income: Steadily adding sustainable strings to its bow

The global bond market stands tall at approximately $128.3 trillion, according to the International Capital Market Association's 2020 assessment. Sovereign, supranational and agency (SSA) bonds dominate the landscape at $87.5 trillion, with corporate bonds accounting for the remaining $40.9 trillion. The market's geography reveals its own concentration risk: America ($22.4 trillion), China ($19.8 trillion) and Japan ($12.4 trillion) collectively represent 62% of the global SSA universe.

Meanwhile, sustainable bonds have surged past the $3 trillion issuance milestone as of March 2025. Green bonds—the pioneering instruments launched in 2007—claim 62% of this total at $1.89 trillion. Their younger siblings, social and sustainability bonds, contribute more than a third of total issuance, while sustainability-linked bonds, barely toddlers in financial terms, already account for 5% ($154 billion). Investors, it seems, increasingly wish their fixed income to be matched with fixed principles.

Equities: The centre of gravity shifts eastward

While public equity markets continue their reign as capitalism's most visible expression, tectonic shifts are underway beneath the surface. Goldman Sachs research projects that emerging markets' share of global equity market capitalisation will rise from roughly 27% currently to 35% by 2030, eventually reaching 47% by 2050 and 55% by 2075. This comes not necessarily because emerging market equities will consistently outperform their developed counterparts, but because maturing economies will increasingly seek public listings for their corporate champions.

The process appears inexorable: emerging markets are forecast to grow at 3.8% for the remainder of the decade—more than double the 1.8% expected in developed markets. As this occurs, America's equity market dominance will wane, with its share projected to fall from 42% in 2022 to 35% by 2030. Wall Street, while still powerful, will increasingly share its spotlight with bourses in Shanghai, Mumbai and beyond.

Private markets: Not so private anymore

If ever a misnomer existed in finance, "private markets" might claim the crown. This supposedly niche corner of finance reached $13.1 trillion in assets under management by June 2023, having grown at a compound annual rate of nearly 20% since 2018. By March 2025, the figure had climbed to approximately $14 trillion—hardly the province of a secretive few.

The sector's future appears equally unmissable, with projections suggesting growth to $20-25 trillion by decade's end, according to Ardian's Executive President. Dry powder reserves—committed but undeployed capital—have increased for nine consecutive years, reaching $3.7 trillion in mid-2023. The ammunition-to-deployment ratio now stands at 1.6 years, up from 0.9 years at the end of 2021, suggesting either discipline or difficulty in finding suitable targets.

ETFs: The financial world's Swiss Army knife

Exchange-traded funds continue their relentless march into investment portfolios worldwide. Global ETF assets reached $13.8 trillion in 2024, according to data from ETFGI, with the industry gathering a record $1.88 trillion in net new assets that year. What began as simple index trackers has evolved into a sophisticated ecosystem where active management increasingly finds expression. Actively managed ETFs have expanded to over $1 trillion in assets, offering investors a middle path between passive tracking and traditional active management.

Gold: The ancient asset shines anew

While cryptocurrencies grabbed headlines as "digital gold," the original article has quietly outperformed. Goldman Sachs projected an 8% rise in gold prices for 2024, though specific figures for 2025 remain elusive in verified sources. Bullion continues to fulfill its traditional role as crisis insurance while adding a new dimension as a hedge against both inflation and currency debasement—a rare combination in today's financial ecosystem.

The algorithmic frontier

Artificial intelligence is reconfiguring the financial landscape at remarkable speed. According to MarketsandMarkets research, the AI in finance market is projected to reach $190.33 billion by 2030, expanding at a compound annual growth rate of 21.8% from 2024. The sector encompasses algorithmic trading, fraud detection, portfolio management and customer service applications, among others. As finance increasingly becomes a technology industry with a banking license, traditional institutions find themselves scrambling to harness AI capabilities or risk displacement by more nimble competitors.

The investment mosaic

For institutional and sovereign investors navigating these vast asset classes, strategic allocation has never been more complex—or consequential. The growing green tint across all sectors—from sustainable real estate to green bonds—represents both risk management and opportunity capture. Meanwhile, the shift toward emerging markets requires recalibrating geographic exposures in both public and private portfolios.

Perhaps most striking is the sheer scale of these markets. When trillions become the standard unit of measurement, even minor percentage allocations translate to enormous capital flows. The consequences of such movements can reshape not just portfolios but economies, making the asset allocation decisions of today the economic realities of tomorrow. In a world where capital moves at ever-increasing velocity, understanding these gigantic pools of assets is less about investment theory and more about mapping the future itself.

"The most significant shift in global finance isn't the rise of any single technology or market, but the unprecedented scale at which capital now moves between asset classes."