Global Markets – a study across some tables
I recently read that a hedge fund operated in 90 markets. My curiosity inspired, with a bit of google and a lot of AI helped me list the key markets around the world. Following is a summary post across a host of tables grouping different markets. I think this understanding not only helps hedge funds but other allocators of capital as well.
(Most of the post and tables are output from chats or
general search on the internet. Please refer to numbers for directional
purposes only.)
An overview of global markets
At the highest level, financial markets are grouped into
major asset classes:
- Equities
(Stocks) – and ETFs, ADRs, REITs
- Derivatives (Options,
Futures, Swaps)
- Fixed
Income (Bonds, Notes, Bills)
- Currencies
(FX)
- Commodities
- Real
Assets (Real Estate, Infrastructure, Natural Resources)
- Alternative
Assets (Private Equity, Venture Capital, Hedge Funds)
- Digital
Assets (Cryptocurrencies, Tokens)
Each of these classes hosts multiple markets, depending on
geography, instruments, and trading venues.
|
Asset
Class |
Market
Type |
Region |
Trading
Venue |
|
Equities |
Single
Stocks |
US, EU,
JP, HK, IN, BR, etc. |
Exchange-Traded
(NYSE, LSE, etc.) |
|
Equities |
ETFs /
Indexes |
Global |
Exchange-Traded |
|
Equities |
ADR /
REITs |
Global |
Exchange-Traded |
|
Fixed
Income |
Government
Bonds |
US, EU,
JP, EM |
Exchange
+ OTC |
|
Fixed
Income |
Corporate
Bonds |
Global |
OTC |
|
Fixed
Income |
High
Yield / EM Debt |
Global |
OTC |
|
Fixed
Income |
Municipals
/ ABS / MBS |
Primarily
US |
OTC |
|
Derivatives |
Options
(Equity, FX, Rates) |
Global |
Exchange
+ OTC |
|
Derivatives |
Futures
(Commodities, Indexes) |
Global |
Exchange-Traded |
|
Derivatives |
Swaps
(IRS, CDS, FX) |
Global |
OTC |
|
FX |
Major
Currency Pairs |
G10 |
Spot +
Derivatives |
|
FX |
EM
Currency Pairs |
Asia,
LatAm, Africa |
Spot +
NDF + Forwards |
|
FX |
FX
Options / Swaps |
Global |
OTC |
|
Commodities |
Energy
(Crude, Nat Gas) |
US,
Global |
Futures
(NYMEX, ICE) |
|
Commodities |
Metals
(Gold, Silver, Copper) |
Global |
Futures
(COMEX, LME) |
|
Commodities |
Agricultural
(Wheat, Soy, Coffee) |
Global |
Futures
(CBOT, ICE) |
|
Commodities |
Livestock |
US |
Futures |
|
Volatility |
Equity
Volatility (VIX) |
US |
Futures
+ Options |
|
Volatility |
FX
Volatility |
G10, EM |
OTC |
|
Volatility |
Interest
Rate Volatility |
US, EU |
Swaptions |
|
Credit |
IG / HY
Bonds |
Global |
OTC +
Exchange |
|
Credit |
CDS /
Credit Derivatives |
Global |
OTC |
|
Credit |
Structured
Credit |
Primarily
US/EU |
Private
Placement / OTC |
|
Digital
Assets |
Spot
Crypto |
BTC,
ETH, etc. |
Crypto
Exchanges |
|
Digital
Assets |
Crypto
Derivatives |
Global |
Futures
+ Options (CME, Binance) |
1. EQUITY MARKETS
There are around 200 stock exchanges in the world, of which
60 are major regional exchanges, 30 of them are actively monitored and
around 20 are where many hedge funds operate.
|
Region |
Approx. Number of Stock Exchanges |
Most Liquid / Hedge Fund-Focused |
|
North America |
~5 |
NYSE, NASDAQ, TSX (Canada) |
|
Europe |
~25 |
LSE, Euronext, Deutsche Börse, SIX, OMX |
|
Asia-Pacific |
~30 |
TSE, HKEX, NSE/BSE, ASX, KRX, SGX |
|
Latin America |
~10 |
B3 (Brazil), BMV (Mexico), BYMA (Argentina), BVC
(Colombia), Bolsa de Santiago |
|
Africa |
~25 |
JSE (South Africa), NSE (Nigeria), EGX (Egypt), BRVM (West
Africa) |
|
Middle East |
~10 |
Tadawul (Saudi Arabia), DFM (Dubai), Boursa Kuwait, QSE
(Qatar) |
Global Exchanges by Market Capitalization (as of 2024
estimates)
|
Exchange |
Region |
Approx. Market Cap (USD Trillion) |
|
NYSE |
US |
~$25T |
|
NASDAQ |
US |
~$20T |
|
Shanghai |
China |
~$7T |
|
Euronext |
EU |
~$6T |
|
LSE |
UK |
~$4T |
|
HKEX |
Hong Kong |
~$4T |
|
TSE |
Japan |
~$6T |
|
Shenzhen |
China |
~$4T |
|
BSE/NSE |
India |
~$4T combined |
|
Saudi (Tadawul) |
Middle East |
~$3T |
These top ~10–15 account for over 85% of global equity
market cap.
ETFs
Major Index Families
|
Index |
Description |
|
S&P 500 |
500 largest US companies; most tracked index |
|
NASDAQ 100 |
Tech-heavy large-cap index |
|
Russell 2000 |
US small-cap benchmark |
|
MSCI World / ACWI |
Global developed (or all country) index |
|
MSCI Emerging Markets |
Equity benchmark for emerging economies |
|
STOXX Europe 600 |
Pan-European index |
|
Nifty 50 / Sensex |
India benchmarks |
|
TOPIX / Nikkei 225 |
Japan equity benchmarks |
Major ETFs by Popularity
|
ETF |
Tracks |
Symbol |
AUM (approx.) |
|
SPDR S&P 500 ETF |
S&P 500 |
SPY |
$400B+ |
|
Invesco QQQ |
NASDAQ 100 |
QQQ |
$250B+ |
|
Vanguard Total Market |
US market |
VTI |
$300B+ |
|
iShares MSCI Emerging Markets |
MSCI EM |
EEM |
$20B+ |
|
iShares Core MSCI World |
MSCI World |
IWDA |
$50B+ |
|
Sector ETFs |
XLF (Financials), XLE (Energy), XLK (Tech), etc. |
Varies |
Varies |
Total Size of the ETF Market (2024)
|
Category |
Value |
|
Global ETF AUM (Assets Under Management) |
~$11–12 trillion USD |
|
US ETF AUM |
~$7.5–8 trillion (≈65–70% of global ETF AUM) |
|
# of ETFs globally |
~9,000+ |
|
# of ETFs in the US |
~3,000+ |
|
% of US stock market held via ETFs |
~15–20%, depending on index and capitalization |
For a comparison, Mutual Funds is a $25-$30 trillion market.
Breakdown by Region (2024)
|
Region |
ETF AUM Estimate |
Notes |
|
United States |
~$7.5–8T |
Largest and most liquid market |
|
Europe |
~$1.8–2.2T |
UCITS-dominated, multiple listing venues |
|
Asia-Pacific |
~$1.5T |
Japan, China, Australia, Korea active |
|
Canada |
~$400B+ |
Highly developed domestic ETF market |
|
Latin America / Others |
~$100–200B |
Growing but limited in liquidity and breadth |
The three giants (BlackRock – $3.5 trillion AUM, Vanguard –
$2.5T, State Street- $1.0 T) control over 75% of US ETF
assets.
One of the things about ETFs is that increased flow in them
implies increased pressure to buy the underlying. Which sort of disconnects
them with fundamentals. At times it feels like this disconnect is the very pool
that HFs look for. So ETFs begin to hurt the market itself?
Benefits of ETFs
|
Benefit |
Impact |
|
Low-cost access |
Democratized investing for small investors |
|
Diversification |
Reduced single-stock risk |
|
Liquidity provider |
Enables price discovery for sectors or countries |
|
Transparency |
Investors know what they own |
|
Innovation |
Thematic, ESG, and risk-managed products |
Drawbacks / Risks
|
Issue |
Effect |
|
Price distortion |
ETFs may move stock prices irrespective of fundamentals |
|
Volatility amplifier |
Rapid ETF selling (esp. inverse/leveraged ETFs) can fuel
panic moves |
|
Passive dominance |
Reduces analyst coverage, valuation rigor; 1–2 firms now
own large % of many companies |
|
Corporate governance erosion |
BlackRock, Vanguard, State Street vote shares with limited
oversight by end investors |
|
Liquidity illusion |
ETFs may seem liquid, but their holdings aren’t (e.g., HY
bonds, EM debt) |
|
Theme chasing |
Fads like AI, cannabis, ESG get flows detached from
performance, creating bubbles |
|
Overreliance |
Market participants begin to treat ETFs as the
market, which can feed feedback loops |
“ETFs have become the default plumbing, but in doing so,
they’ve rewired the pipes of capital allocation. The result is a market that
flows more like a river of crowd behavior, where hedge funds scout eddies and
distortions along the way.”
And on a philosophical note:
“There was a time when markets reflected the world—its
risks, its inventions, its hope. A company made something; its shares
responded. A government changed policy; capital shifted. The financial system
was a living nervous system, its signals carrying stories of value and warning.
But over time, capital began to mirror itself.
We created indexes—mirrors of markets.
Then came ETFs—mirrors of those mirrors.
And in doing so, we replaced stories with flows,
decisions with allocations, agency with exposure.”
ADRs
An American Depositary Receipt (ADR) is a
US-traded security that represents shares in a foreign company. It allows
investors to buy shares of foreign companies like Nestlé, Alibaba, or
Toyota—without dealing with overseas exchanges or currencies. Always
denominated in USD, it can trade on NYSE, NASDAQ or OTC. There are three
levels: Level I (OTC), Level II (listed), Level III (public offering).
Overall Size (as of 2024 estimates)
|
Metric |
Approximate Value |
|
Total Market Cap of ADRs listed in the US |
~$3.5 – $4 trillion (sizeable but still niche compared to
US equity markets of $50T+) |
|
# of Sponsored ADR Programs (active) |
~2,000+ |
|
# of ADRs traded on US exchanges (Level II & III) |
~450–500 |
|
# of ADRs traded OTC (Level I) |
~1,500+ |
|
% of NYSE/NASDAQ Market Cap |
~8–10% indirectly represents foreign firms |
Note: This does not include dual-listed
shares on US exchanges that are not structured as ADRs (e.g., via direct
foreign listings or local subsidiaries).
ADRs By Country / Region (Top Contributors)
|
Country |
Example ADRs |
Share of ADR Market Cap |
|
China |
BABA, JD, BIDU, PDD |
~30–35% |
|
UK |
BP, GSK, RIO |
~10–12% |
|
Switzerland |
NVS, NSRGY, ROG |
~8–10% |
|
Japan |
TM, SNE, MFG |
~7–8% |
|
India |
INFY, WIT, TCS (indirect) |
~3–5% |
|
Germany |
SAP, DB, BAYRY |
~3–4% |
|
Brazil |
PBR, VALE, ITUB |
~2–3% |
|
Others |
Korea, France, Israel, Canada, Russia (pre-2022) |
Remaining share |
REITs
A REIT (Real Estate Investment Trust) is a publicly traded
company that owns, operates, or finances income-producing real estate. It
allows investors to gain exposure to real estate assets—without directly owning
property.
Types of REITs
|
Category |
Description |
|
Equity REITs |
Own and operate real estate (e.g., malls, apartments, data
centers) |
|
Mortgage REITs (mREITs) |
Invest in mortgages and MBS, earn via spread/income |
|
Hybrid REITs |
Combine both |
|
Publicly Traded |
Listed on exchanges |
|
Private or Non-Traded |
Illiquid, used by institutional or HNW investors |
Within REITs, there can be sectors such as Residential,
Office, Retail, Industrial, Healthcare, Data Centres, Cell Towers, Hospitality,
Self-Storage etc.
Market Size (2024 Estimates)
|
Metric |
Value |
|
Global REIT Market Capitalization |
~$2.5 – $3 trillion USD |
|
US-listed REITs (via Nareit) |
~$1.5T+ (across ~200 companies) |
|
REIT Share of Public Equity Markets |
~2–3% of global equity market cap |
|
Top REIT Jurisdictions |
US, Australia, Singapore, Japan, UK, Canada, Germany |
2. DERIVATIVES
The Derivatives have a large notional market size or face
value of $600-700 trillion across exchange traded and OTC derivatives. The
actual premium or cash exchanged is far less than notional. In options, for
example, premium turnover may be ~1–2% of notional value
|
Market Measure |
Approximate Size |
|
Global Derivatives Market – Notional Outstanding (OTC +
Exchange Traded) |
$600–700T (up to $1 quadrillion) |
|
Notional Outstanding (Exchange Traded) |
~$100–120T |
|
Notional Outstanding (OTC) |
~$500T+ |
|
Gross Market Value (OTC) |
~$14T (mid‑2023 estimate). |
|
Exchange-Traded Contracts (2023) |
137.3 billion contracts (Options 108 billion, Futures 29
billion). Of which equity index derivatives ~100 billion, Single stock
derivatives are ~13 billion contracts |
|
Monthly Volume (e.g. Dec 2023) |
15.17 billion contracts |
|
Open Interest (end 2023) |
~1.25 billion contracts (half in North America) |
For the Exchange Traded Derivatives (Equity Index and
Options dominate), India is one of the biggest markets reaching 84–85 billion contracts, making it the
top global derivatives hub by volume—a remarkable
share (≈78%) of global options trading.
One of the important points here, is that IRDs (interest and
FX swaps, FRAs) dominated the notional volume of OTC—making up approximately
80% of total OTC notional outstanding.
3. FIXED INCOME
Fixed income is larger than global equity markets,
especially when including sovereign and securitized debt.
|
Fixed Income Segment |
Estimated Global Size (2024) |
Notes |
|
Government Bonds (Sovereign Debt) |
$70-80 trillion |
US Treasuries (~$26T), Eurozone, Japan, China lead |
|
Municipal Bonds (Local Gov) |
$4-5 trillion |
Primarily US tax-exempt muni market |
|
Corporate Bonds |
$35-40 trillion |
Includes investment-grade and high-yield globally |
|
Agency Bonds |
$8-10 trillion |
Includes Fannie Mae, Freddie Mac, EIB, World Bank |
|
Securitized Products (MBS, ABS, CLOs) |
$15-20 trillion |
MBS dominates; ABS/CLOs growing |
|
Inflation-Linked Bonds |
$3-4 trillion |
TIPS (US), linkers (UK), OATi (France) |
|
Emerging Market Debt |
$7-10 trillion |
Both sovereign and corporate debt |
|
Green Bonds (subset across types) |
$3-4 trillion |
Rapidly growing, across sovereign, corp, and agencies |
GOVERNMENT BONDS
If we consider the Government Bonds market in detail:
|
Country/Region |
Estimated Government Bond Market Size (2024) |
Bond Types |
|
United States |
$26-27 trillion |
Treasuries (T-Bills, Notes, Bonds, TIPS) |
|
Japan |
$10-11 trillion |
JGBs (short-term, long-term, inflation-linked) |
|
China |
$9-10 trillion |
CGBs, policy bank bonds, municipal local government bonds |
|
Euro Area (aggregate) |
$10-12 trillion |
Bunds (Germany), OATs (France), BTPs (Italy), Bonos
(Spain) |
|
United Kingdom |
$2.5-3 trillion |
Gilts (conventional and inflation-linked) |
|
India |
$1.8-2 trillion |
G-Secs, T-Bills, SDLs (state development loans) |
|
Canada |
$1.5-1.7 trillion |
Government of Canada Bonds and Bills |
|
Brazil |
$1.3-1.5 trillion |
LTNs, NTN-Fs, NTN-Bs (fixed rate, inflation-linked) |
|
Australia |
$1.2-1.4 trillion |
Commonwealth Government Securities (CGS) |
|
South Korea |
$1-1.2 trillion |
KTBs (Korea Treasury Bonds) |
Japan’s debt-to-GDP ratio is the highest, yet it remains
largely domestically funded via bonds held by Japanese institutions and the
central bank. U.S. government debt is the largest in absolute terms, and is
almost entirely Treasury bond-funded. China’s public borrowing is substantial,
though detailed fragmentation across bond instruments exists. Most debt is
bond-based.
CORPORATE BONDS
The next largest market in Fixed Income is Corporate Bonds.
It represents 50% of total credit market. United States and China together
account for roughly 45% of the global corporate bond market, with the U.S. at
$10.9 trillion and China at
$7.4 trillion in
outstanding corporate bonds.
Corporate Bonds- Estimated Market Size
|
Country |
Estimated Outstanding Corporate Bonds |
Notes |
|
United States |
~ $10.9T
(largest single market) |
Investment-grade and high-yield issuance dominate |
|
China |
~ $7.4T |
Growing rapidly; mix of state-owned and private issuers |
|
Europe |
~$8–10T |
Fragmented among multiple EU countries, incl. UK |
|
Japan |
Several trillion USD |
Significant for non-financial bonds |
|
Others (ex-US/China) |
Remaining share (~55%) |
Includes Canada, India, Brazil, Australia, etc. |
As per Wikipedia, the highest corporate debt globally is
held by major industrial, telecom, and automotive companies: Volkswagen:
~$196B, Toyota: ~$179B, Verizon: ~$172B, AT&T: ~$152B, Deutsche
Telekom: ~$150B. (But VW’s $196B+ total debt includes a large portion (~$100B+)
from Volkswagen Financial Services used to fund lease and loan portfolios.)
STRUCTURED FINANCE MARKET
Where cash flows from real assets or loans are bundled and
sold as tradable securities. Key markets:
|
Region/Country |
Securitized Product Type |
Estimated Market Size (2024) |
Notes |
|
US |
Agency Mortgate Backed Securities (Fannie Mae, Freddie
Mac, Ginnie Mae) |
$9-$10 trillion |
Largest and most liquid MBS market globally |
|
US |
Non-Agency RMBS (private-label) |
$1.5-2 trillion |
Includes subprime, Alt-A, jumbo mortgages |
|
US |
CMBS (Commercial Mortgage-Backed Securities) |
$600-800 billion |
Backed by income-generating commercial properties |
|
US |
Asset Backed Securities (Auto, Credit Card, Student Loans) |
$1.5-2 trillion |
Shorter duration, high credit quality (Key funding tools
for lenders) |
|
Europe (Eurozone + UK) |
Covered Bonds (Mortgage + Public Sector) |
$3-3.5 trillion |
Heavily regulated, central to bank funding |
|
Europe |
RMBS/CMBS/ABS |
$1.5-2 trillion |
Revived after 2008, still smaller than US market |
|
China |
RMBS, Auto ABS, Leasing ABS |
$1.5-2 trillion |
Rapid growth since 2015, heavily supported by policy banks |
|
Japan |
ABS, CMBS |
$200-300 billion |
Niche but stable issuance |
|
Australia |
RMBS (prime + non-conforming) |
$300-400 billion |
Mostly prime loans, key bank funding tool |
|
Global |
CLOs (Collateralized Loan Obligations) |
$1.4-1.6 trillion |
Primarily US and EU exposure |
EMERGING MARKET DEBT
Though counted in above, still, since it is traded as
distinct asset class, here some details:
|
Country/Region |
Debt Type |
Primary Currency |
Estimated Total EMD Size (2024) |
|
China |
Sovereign + Corporate |
Primarily Local (CNY), some USD |
$2.5-3 trillion |
|
Brazil |
Sovereign + Corporate |
Local (BRL), USD-denominated bonds |
$1.2-$1.5 trillion |
|
India |
Sovereign + Corporate |
Primarily Local (INR), limited USD bonds |
$1- 1.2 trillion |
|
Mexico |
Sovereign + Corporate |
Local (MXN), some USD |
$700-900 billion |
|
South Africa |
Sovereign + Corporate |
Local (ZAR), USD/EUR bonds |
$500-700 billion |
|
Russia* |
Sovereign + Corporate |
Mostly Local (RUB), some USD/EUR (restricted) |
$500-600 billion (pre sanctions) |
|
Indonesia |
Sovereign + Corporate |
Local (IDR), USD bonds |
$400-$600 billion |
|
Turkey |
Sovereign + Corporate |
Local (TRY), high use of USD bonds |
$300-$500 billion |
|
Argentina |
Primarily Sovereign |
USD bonds, local peso issuance (volatile) |
$250-$400 billion |
|
Others (e.g., Nigeria, Vietnam, Philippines) |
Mixed |
Primarily Local |
$500-700 billion combined |
PRIVATE CREDIT
Up from ~$500B a decade ago. This has been one of the most
explosive post-GFC trends in global markets.
Market Size & Growth (2024)
|
Metric |
Value |
|
Total Private Credit AUM (Global) |
~$2.8–3.0 trillion |
|
US share |
~65–70% of total |
|
Europe share |
~20% |
|
Asia & others |
~10–15% (growing fast) |
Types of Private Credit Strategies
|
Strategy |
Description |
Typical Yield |
|
Direct Lending |
Senior secured loans to mid-sized firms |
8–12% |
|
Mezzanine Debt |
Subordinated debt between equity and senior |
12–16% |
|
Venture Debt |
Loans to VC-backed startups |
10–15% |
|
Distressed/Opportunistic |
Buying troubled or special situations |
15–25%+ |
|
Asset-Based Lending (ABL) |
Loans backed by assets (receivables, inventory) |
8–12% |
|
Real Estate/Infra Debt |
Project- or asset-backed lending |
6–10% |
|
NAV Lending |
Loans to PE funds against portfolio NAV |
10–15% |
BANK LOANS
What we have considered above is largely publicly traded
fixed income. But in countries where bond markets are not developed, banks
provide the necessary credit. Some pointers around that:
|
Credit Category |
Size Estimate |
|
Global Bank Loans (outstanding) |
~$85–90 trillion |
|
• To Corporates |
~$45 trillion |
|
• To Governments |
~$15–20 trillion |
|
• To Households |
~$25 trillion |
In contrast:
- Corporate
bond market: ~$40 trillion
- Private
credit market (non-bank lenders): ~$2.5–3 trillion
- Syndicated/leveraged
loans: ~$1.5–2 trillion
So bank advanced credit is the largest single pool of credit
provision worldwide, especially outside the U.S. where bond markets are less
developed.
4. FOREIGN EXCHANGE (FX) MARKETS
Foreign Exchange (FX) market is the largest and most liquid
market in the world, and it forms the foundation for all global trade,
investment, and capital flows.
The FX market is where currencies are traded. It’s
decentralized, over-the-counter (OTC), and open 24 hours a day during the
business week. A large part of it overlaps with derivatives, spot transactions
being only 28% of the total FX activity.
The top five currencies are USD, EUR, JPY, GBP, CNY. The
major centres are London (38% of global activity), New York, Singapore, Hong
Kong, Tokyo.
FX Market-Based Activity
|
Metric |
Value |
|
Total FX turnover (daily) |
~$7.5 trillion
(April 2022) |
|
FX Swaps |
~$3.8 t/day
(~51%) |
|
Spot transactions |
~$2.1 t/day
(~28%) |
|
Forwards |
~$1.1 t/day
(~15%) |
|
Options, currency swaps |
~4% and ~2% respectively |
|
London FX volume (Oct 2024) |
~$3.755 t/day
(38.1% share) |
|
EUR/USD (London) |
~$797 b/day
(~25% of London volume) |
Following are the top traded currency pairs:
|
Currency Pair |
Description |
Est. Share of Daily Volume |
Notes |
|
EUR/USD |
Euro / US Dollar |
~23% of global volume |
Most liquid, heavily used for trade and investment flows |
|
USD/JPY |
US Dollar / Japanese Yen |
~13% |
Highly sensitive to interest rate differentials and BOJ
policy |
|
GBP/USD |
British Pound / US Dollar |
~9% |
Known as ‘Cable’; major trading and reserve currency |
|
USD/CHF |
US Dollar / Swiss Franc |
~4% |
Safe haven during crises, sensitive to SNB actions |
|
AUD/USD |
Australian Dollar / US Dollar |
~5% |
Commodity-linked; influenced by China demand, RBA policy |
|
USD/CAD |
US Dollar / Canadian Dollar |
~4% |
Oil-sensitive; influenced by BoC and US economy |
|
USD/CNY (offshore) |
US Dollar / Chinese Yuan |
~4% |
Heavily managed by PBOC; capital flow-sensitive |
|
EUR/GBP |
Euro / British Pound |
~2% |
Cross-currency flows within Europe |
|
EUR/JPY |
Euro / Japanese Yen |
~2% |
Used in carry trades and macro views |
|
USD/KRW |
US Dollar / South Korean Won |
~1–2% |
Export-sensitive, active in Asia hours |
USD was on one side of ~88% of all FX transactions, followed
by EUR (~34%), JPY (~14%), GBP (~19%), and RMB/other EM currencies (~26%)
5. COMMODITIES MARKETS
The commodities market is where raw physical assets are
bought, sold, and traded — either physically or via derivatives (futures,
options, swaps). These can be related to energy, metals, agricultural,
livestock or other commodities.
The most interesting thing about these markets is that
derivatives trading volume vastly exceeds physical turnover.
Global Commodity Market Size (2024)
|
Segment |
Estimated Annual Market Size |
|
Commodity Derivatives (futures, options) |
$20–30 trillion notional traded/year |
|
Physical commodity trade |
~$16 trillion globally (UNCTAD est.) |
|
Energy |
Largest traded class (esp. oil, gas) |
|
Metals |
~$2–3 trillion spot + futures combined |
|
Agriculture |
~$2 trillion globally (grains, softs) |
Following are Energy commodities key markets:
|
Energy Commodity |
Estimated Annual Market Size |
Notes |
|
Crude Oil (WTI, Brent) |
$2 -$2.5 trillion |
Most traded commodity globally; benchmark for global
energy pricing |
|
Natural Gas (Henry Hub, TTF, JKM) |
$500-700 billion |
Volatile markets; regional pricing (US, Europe, Asia) |
|
Refined Products (Gasoline, Diesel, Jet Fuel) |
$300-400 billion |
Linked to transportation and airline hedging |
|
LNG (Liquefied Natural Gas) |
$200-300 billion |
Rapidly growing with Asian demand; spot and long-term
contracts |
|
Electricity (futures + spot) |
$200-300 billion |
Regional markets in US, EU, Japan, Australia |
|
Coal (thermal + metallurgical) |
$100-150 billion |
Still significant in India, China, and EMs |
|
Carbon Credits / Emissions (ETS, EUA, RGGI) |
$100-120 billion |
Europe leads; growing global voluntary markets |
|
Uranium |
$10-15 billion |
Relatively illiquid; traded via long-term supply contracts |
To understand the role of derivatives in this market:
|
Commodity |
Physical Volume (2023-24) |
Derivatives Volume (Relative to Physical) |
Notes |
|
Crude Oil |
90-100 million barrels/day |
Estimated 30-40x in futures/options volume |
CME, ICE dominate; highly financialized |
|
Natural Gas |
4,000-5,000 bcm/year (global) |
10-15x in futures/options, especially in US and Europe |
Henry Hub, TTF, JKM benchmark futures |
|
LNG |
~500 million tonnes/year |
Mostly physical, small but growing derivatives layer |
Some JKM and TTF-linked swaps |
|
Refined Products (Gasoline, Diesel) |
14-16 million barrels/day (combined) |
5-10x derivatives activity |
Futures used for airline and transport hedging |
|
Electricity |
24,000+ TWh/year (global) |
Roughly 1-2x in futures, varies by region |
Traded on regional power exchanges |
|
Coal |
8 billion tonnes/year |
Low derivatives use (~1x or less) |
Some ICE/Asian futures activity |
|
Carbon Credits (EUA, RGGI) |
~13 billion tonnes CO2(2023) |
Physical + growing futures/options (~2-3x) |
EU ETS, voluntary markets expanding |
|
Uranium |
~70,000 tonnes/year |
Primarily physical (contracts), very thin derivatives |
No liquid futures market |
A look at global metals market. Here too, derivatives play
an important role. Metals are grouped as precious metals, industrial/base
metals, Batter/EV metals and Steel Inputs.
Global Market Size Estimates (2024)
|
Segment |
Annual Value |
Notes |
|
Gold (physical + ETF + futures) |
~$12–14 trillion |
Includes reserves, ETFs, spot, futures |
|
Silver |
~$1.5 trillion |
Heavy industrial + investment demand |
|
Copper |
~$3–4 trillion |
Core industrial bellwether |
|
Aluminum |
~$2.5 trillion |
Energy-intensive, highly traded |
|
Nickel, Zinc, Lead |
~$500–700 billion each |
Volatile, industrial-sensitive |
|
Lithium (spot + contract) |
~$100–200 billion |
Mostly via long-term supply deals |
|
Iron Ore (seaborne) |
~$150–300 billion |
Heavily influenced by China demand |
|
Cobalt, Rare Earths |
~$20–50 billion |
Supply concentrated in few countries |
Here again, a look at derivatives volume:
|
Metal |
Physical Trade Volume (per year) |
Derivatives Volume (Relative to Physical) |
Notes |
|
Gold |
~4,700 tonnes/year |
Very high (~10-15x physical) |
Includes COMEX, OTC, LBMA, ETFs |
|
Silver |
~30,000 tonnes/year |
High (~5-8x physical) |
Active in futures, options, and ETFs |
|
Copper |
~25 million tonnes/year |
High (~5-10x physical) |
LME and COMEX futures dominate |
|
Aluminum |
~70 million tonnes/year |
High (~3-5x physical) |
LME is main venue for hedging and trade |
|
Nickel |
~3 million tonnes/year |
Moderate to high (~2-4x) |
LME, volatile after 2022 short squeeze |
|
Zinc |
~13 million tonnes/year |
Moderate (~2-3x) |
Industrial metal traded via LME futures |
|
Lithium |
~1.5 million tonnes LCE/year |
Low (<1x) |
Mostly physical offtake agreements, limited futures (e.g.,
CME launched in 2021) |
|
Iron Ore |
~2.5 billion tonnes/year |
Moderate to high (~2-5x) |
SGX, Dalian Exchange; benchmarked to China demand |
Amongst Agricultural commodities, the largest markets are
corn ($250-300 billion), Wheat ($150-200 billion), Soybeans ($160-180 billion).
Here too high volume of derivatives product relative to physical volume.
6. REAL ASSETS MARKET
Real assets are physical or tangible investments that have
intrinsic value due to their substance and utility. They contrast with
financial assets, which are claims on future cash flows (like stocks or bonds).
Estimated Global Market Size (2024)
|
Real Asset Segment |
Estimated Value |
|
Global Real Estate |
~$380 trillion (incl. all land + structures) |
|
• Investable Real Estate |
~$35–40 trillion (institutional subset) |
|
Infrastructure (Core + Core+) |
~$10–15 trillion |
|
Natural Resources |
~$5–6 trillion (combined farmland + timber + water) |
|
Energy Assets (Private/Listed) |
~$4–6 trillion |
|
Hard Commodities (held) |
~$3–5 trillion (mostly gold, silver) |
7. ALTERNATIVES
Combined, alternatives may represent 25–30% of institutional
portfolios, depending on mandate.Alternative assets (or alternatives) refer to
all investments that fall outside traditional equity, bond, and cash markets.
They are diverse, often illiquid, in includes some of the above mentioned asset
classes, and then PE, HF etc.
Estimated Global Market Size (2024)
|
Alternative Asset Class |
Approx. Size |
|
Private Equity |
~$11 trillion |
|
Hedge Funds |
~$4.5 trillion |
|
Private Credit |
~$3 trillion |
|
Real Assets (investable subset) |
~$15 trillion |
|
Commodities (tradable exposure) |
~$30+ trillion notional/year |
|
Structured Finance |
~$20–25 trillion outstanding |
|
Digital Assets |
~$1.5–2 trillion (volatile) |
|
Collectibles & Other |
~$2–3 trillion (non-institutional) |
8. DIGITAL ASSETS
“Digital assets are digitally native financial
instruments created, transferred, and stored on blockchains or distributed
ledgers.” Although retail-dominated, institutional rails are being
built.
They include:
|
Type |
Examples |
|
Cryptocurrencies |
Bitcoin (BTC), Ethereum (ETH), Solana (SOL) |
|
Stablecoins |
USDC, USDT, DAI (pegged to fiat currency) |
|
Utility Tokens |
Filecoin (FIL), Chainlink (LINK) — used within platforms |
|
Governance Tokens |
UNI (Uniswap), AAVE — vote on protocol rules |
|
NFTs |
Digital collectibles, art, music (e.g., CryptoPunks) |
|
Tokenized Real Assets |
Real estate, gold, or equity shares issued on-chain |
|
CBDCs (Gov-issued) |
Digital yuan, eNaira, digital euro (early stage) |
They become relevant for digital money and payments,
permissionless finance (DeFi lending), Tokenization of Real World Assets,
decentralized infrastructure etc.
Market Size (2024–25)
|
Asset |
Estimated Size |
|
Total Crypto Market Cap |
~$1.8–2.2 trillion |
|
• Bitcoin (BTC) |
~$1.0–1.2 trillion |
|
• Ethereum (ETH) |
~$350–450 billion |
|
Stablecoins in Circulation |
~$140–160 billion (mostly USDT + USDC) |
|
NFTs (active) |
<$5 billion (major correction from 2021 highs) |
|
Tokenized Real-World Assets (RWAs) |
~$6–10 billion (early growth) |
In terms of mainstream involvement,
Mainstream Institutional Involvement
|
Type of Player |
Engagement |
|
Asset Managers |
BlackRock (Bitcoin ETF, tokenization fund), Fidelity (BTC
custody) |
|
Banks |
JPMorgan (Onyx blockchain platform, repo settlement), Citi
(tokenized deposits), HSBC (tokenized gold vaults) |
|
Exchanges |
CME (BTC/ETH futures), NASDAQ (custody pilot), ICE via
Bakkt |
|
Custodians |
State Street, BNY Mellon exploring digital custody
services |
|
Sovereign/Regulators |
MAS (Singapore), BIS Innovation Hub, SEC/CFPB scrutiny |
As for IBIT (Blackrock Bitcoin ETF), it is a fastest ETF to
$80 billion in history. It owns over 700,000 BTC or 3.5% of total supply. It
also commands 60% of all US spot Bitcoin assets. Allows or beidges access to
many institutions and people who are not on the blockchain directly or cannot
be on the blockchain directly.
Summary Comparison of the key categories
|
Category |
Operates As |
Value Creation |
Investor Lens |
|
BTC |
Scarce, decentralized money |
Trust in finite supply + adoption |
Store-of-value + monetary optionality |
|
NFTs |
Digital cultural assets |
Cultural capital + uniqueness |
Art, IP, access, speculation |
|
Tokenization |
On-chain wrappers for real-world assets |
Liquidity + efficiency gains |
Real asset proxy + modular finance |
|
Stablecoins |
Digital cash/payment layer |
Trust, peg, liquidity velocity |
Not investment → infrastructure play |
A Closing note.
A table summing up the above discussion
|
Market Category |
Segment |
Estimated Market Size (2024–2025) |
Notes |
|
Equity Markets |
Global Public Equities |
$110-120 trillion |
Includes all listed stocks globally |
|
Fixed Income |
Sovereign + Corporate Bonds |
$140-150 trillion |
Includes gov, IG, HY, and emerging market bonds |
|
Bank Credit |
Loans on bank balance sheets |
$85-90 trillion |
Private lending held by global banks |
|
Private Credit |
Direct lending, mezzanine, etc. |
$2.8-3.0 trillion |
Non-bank credit, illiquid |
|
Derivatives Markets |
All types (IR, FX, equity, credit) |
$1.0+ quadrillion notional |
High notional, lower actual exposure |
|
FX Markets |
Spot, forwards, swaps, options |
$7.5 trillion/day |
Daily turnover, largest market by liquidity |
|
Commodities |
Energy, Metals, Agriculture |
$30+ trillion/year (notional) |
Includes physical + futures volume |
|
Energy Commodities |
Oil, gas, LNG, power |
$5-7 trillion |
Subset of broader commodities |
|
Metals |
Gold, copper, lithium, etc. |
$15-20 trillion (incl. derivatives) |
Precious + industrial + battery metals |
|
Agricultural Commodities |
Grains, softs, livestock |
$1.0-1.5 trillion |
Varies by year and price cycles |
|
Credit Derivatives |
CDS, CLOs, etc. |
$8-10 trillion |
Synthetic exposure to credit risk |
|
Real Estate (Investable) |
Core + opportunistic |
$35-40 trillion |
Excludes owner-occupied housing |
|
Infrastructure |
Private + listed infra assets |
$10-15 trillion |
Long-duration, essential assets |
|
Natural Resources |
Timber, farmland, water |
$5-6 trillion |
Physical land-based real assets |
|
Digital Assets |
Crypto, tokens |
$1.5-2 trillion |
Volatile, mostly retail + VC exposure |
|
Hedge Funds |
Global hedge fund AUM |
$4.5 trillion |
Macro, long/short, credit, multi-strategy |
|
Private Equity |
Buyouts, VC, growth |
$11 trillion |
Includes all private market equity funds |
|
Alternatives Total |
All non-traditional assets |
$35-45 trillion |
Subset of global portfolios |