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Information Release
14 December 2012
Central BankDataonInvestment Funds
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The CentralBank today publishes statistics for Q3 2012 oninvestmentfunds (IFs) resident in
Ireland. IFs, measured by total shares/units in issue, increased by 4.4 per cent to €892 billion
by end-Q3 2012, driven by revaluations of €24.3 billion and net new subscriptions of
€13.5 billion. Growth was concentrated in equity and bond funds, at 5.3 and 4.5 per cent
respectively, though was also evident in all fund types. During the same period, European
units/shares in issue increased by 4.4 per cent to €6.3 trillion, within which equity funds
increased by 5.3 per cent and bond funds increased by 4.6 per cent.
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These data were first introduced in the article ‘The InvestmentFunds Industry in Ireland – A Statistical
Overview’ published in Quarterly Bulletin 1, 2010.
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Chart 1: Value of InvestmentFunds Shares/Units
Transaction Net Inflows (RHS) Value of InvestmentFunds (LHS)
€ billion
Please note that the movement from Q3 2011 to Q4 2011 includes €114 billion of MMFs that were reclassified as IFs in accordance with
Regulation ECB/2001/12. Please see information release of Investment Fund Statisitics, 14 March 2012, for further details.
Source: InvestmentFunds Statistics, CentralBank of Ireland.
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Looking at the asset holdings of Irish IFs, 77 per cent were located outside of the euro area,
14 per cent in the rest of the euro area and 9 per cent within the state
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. Looking at the
ownership of units/shares in Irish IFs, 70 per cent were held by non-euro area residents,
24 per cent by other euro area residents and 6 per cent by Irish residents.
Sovereign bond investment holdings increased by 6.5 per cent to €160 billion in Q3 2012. UK
sovereign bonds, the largest country holding of Irish IFs, benefitted from inflows of
€3.1 billion to close at €46.9 billion. Holdings of German sovereign bonds experienced a net
inflow of €1.2 billion to close at €20.1 billion. French sovereigns experienced outflows of
€0.5 billion despite positive revaluations of €0.9 billion to close at €11.3 billion, perhaps
indicating market preparations for a potential ratings downgrade. Spanish and Italian
sovereign bonds had inflows of €0.5 billion and €1.8 billion respectively, to close at
€1.4 billion and €8.4 billion, indicating a favourable response to ECB policy measures.
Holdings of ‘outer-core’ EU sovereigns, such as the Netherlands, Belgium and Finland
remained largely static at low levels, of €3.5 billion, €2.4 billon and €0.3 billion respectively.
Irish sovereign holdings remained small at €0.4 billion. Holdings of US and Japanese
sovereign assets remained relatively stable at €39 billion and €2.2 billion respectively. It is
worth noting, however, that investment in non-government paper far exceeds that of sovereign
bonds, accounting for €430 billion.
Table 1: Debt Securities – IF Holdings by Sovereign and Private Sector – Selected Countries
€ billion
Sovereign
Private
Total 160 430
of which:
US 39 155
UK
47
52
Ireland 0.4 22
Germany 20 14
France 11 21
Net inflows into holdings of Monetary and Financial Institutions’ (MFIs) assets amounted to
5.5 per cent of total holdings, to a stock of €203 billion in Q3 2012, comprising €176 billion
in paper and €26.9 billion in shares. UK MFIs experienced the largest inflows, up €5.6 billion
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These figures exclude unclassified assets which account for €75 billion, or 7.6 per cent, of total assets of €985
billion.
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to close at €34.4 billion. Exposure to German MFIs moved the opposite direction,
experiencing outflows of €2.6 billion to close at €10.5 billion. Spanish and Italian MFIs
remained static at €1.4 billion and €1.1 billion respectively. Irish MFI holdings increased
marginally to €3.5 billion. The non-financial sector experienced net outflows of 2 per cent to
close at €364 billion, split between €235 billion in equity and €129 billion in commercial
paper.
Investment Funds by Category
Bond funds, which accounted for €373 billion of Irish IFs by shares/units in issue,
experienced inflows of €12 billion and positive revaluations of €4.2 billion, amid generally
increasing bond prices. This continues a longer term trend of significant inflows into bond
funds, which comprised 42 per cent of Irish IFs by end-Q3 2012, compared with 24 per cent
at end-Q1 2010.
Equity funds, which accounted for €290 billion of IFs, saw positive revaluations of €12.9
billion and net transactions inflows of €1.7 billion, in line with strong global equity markets
over the quarter. Equity funds have experienced positive revaluations since late 2011,
following a sharp negative adjustment in mid-2011.
Hedge funds increased in value to €79 billion, driven largely by revaluations of €2.2 billion
amid a net transactions outflow of €0.3 billion. The revaluation performance was tempered
by the fact that some hedge funds assumed short positions in a positively performing market.
Hedge funds have not outperformed other investment strategies in the year to date.
Other funds, comprising mostly mixed funds
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, experienced negligible inflows of €0.2 billion,
despite positive revaluations of €5.1 billion, culminating in an increase in overall stock to
€152 billion.
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These also include real estate and other unclassified funds.
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Equity Bond Hedge Remaining
Chart 2: Change in Value of Shares/Units by Investment Fund Category,
Q3 2012
Change in value of investment fund shares/units (excl. reclassifications)
Transactions
Revaluations
€ billion
Source: InvestmentFunds Statistics, CentralBank of Ireland.
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Notes to Editors
These data were published under the requirements of Regulation (EC) No 958/2007
concerning statistics on the assets and liabilities of investmentfunds (ECB/2007/8), which
was passed on 27 July 2007, obliging investmentfunds to report quarterly balance sheets.
Reporting is obligatory for all investmentfunds resident in Ireland.
The full data series for Ireland is available from the CentralBank website while euro area
statistics are available from the ECB website.
Type of Fund
Definition
Equity funds
Equity funds are investmentfunds primarily investing in shares and other
equity. The criteria for classifying an investment fund into equity funds are
derived from the public prospectus, fund rules, instruments of incorporation,
established statutes or by-laws, subscription documents or investment contracts,
marketing documents, or any other statement with similar effect.
Bond funds
Bond funds are investmentfunds primarily investing in securities other than
shares. The criteria for classifying an investment fund into bond funds are
derived from the public prospectus, fund rules, instruments of incorporation,
established statutes or by-laws, subscription documents or investment contracts,
marketing documents, or any other statement with similar effect.
Mixed funds
Mixed funds are investmentfunds investing in both equity and bonds with no
prevalent policy in favour of one or the other instrument. The criteria for
classifying an investment fund into mixed funds are derived from the public
prospectus, fund rules, instruments of incorporation, established statutes or by-
laws, subscription documents or investment contracts, marketing documents, or
any other statement with similar effect.
Hedge funds
Hedge funds, for the purpose of IF data collection, mean any collective
investment undertakings (CIU) regardless of its legal structure under national
laws, which apply relatively unconstrained investment strategies to achieve
positive absolute returns, and whose managers, in addition to management fees,
are remunerated in relation to the fund’s performance. For that purpose, hedge
funds have few restrictions on the type of financial instruments in which they
may invest and may therefore flexibly employ a wide variety of financial
techniques, involving leverage, short-selling or any other techniques. This
definition also covers funds that invest, in full or in part, in other hedge funds
provided that they otherwise meet the definition. These criteria to identify hedge
funds must be assessed against the public prospectus as well as fund rules,
statutes or by-laws, subscription documents or investment contracts, marketing
documents or any other statement with similar effect of the fund.
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Real estate
funds
Real estate funds are investmentfunds primarily investing in real estate. The
criteria for classifying an investment fund into real estate funds are derived from
the public prospectus, fund rules, instruments of incorporation, established
statutes or by-laws, subscription documents or investment contracts, marketing
documents, or any other statement with similar effect.
Other funds
Other funds are investmentfunds other than bond funds, equity funds, mixed
funds, real estate funds or hedge funds.
Open-ended
IFs
Open-ended investmentfunds are investment funds, the units or shares of
which are, at the request of the holders, repurchased or redeemed directly or
indirectly out of the undertaking’s assets.
Closed-ended
IFs
Closed-ended investmentfunds are investmentfunds with a fixed number of
issued shares and whose shareholders have to buy or sell existing shares in order
to enter or leave the fund.
. 1 Information Release 14 December 2012 Central Bank Data on Investment Funds 1 The Central Bank today publishes statistics for Q3 2012 on investment funds (IFs) resident in. incorporation, established statutes or by-laws, subscription documents or investment contracts, marketing documents, or any other statement with similar effect. Bond funds Bond funds are investment. investment contracts, marketing documents, or any other statement with similar effect. Other funds Other funds are investment funds other than bond funds, equity funds, mixed funds, real estate funds