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Central Bank of Ireland-Investment Funds Statistics: Q1 2014

July 2, 2014

ENP Newswire - 02 July 2014

Release date- 01072014 - Central Bank of Ireland-Investment Funds Statistics: Q1 2014.

The net asset value of investment Funds resident in Ireland (IFs) expanded by over 4 per cent in Q1 2014, rising to EUR1,115 billion from EUR1,070 billion at the end of 2013;

The IF industry has more than trebled in size since Q2 2009 on a net asset value basis;

The performance in Q1 2014 was largely driven by investor inflows into IFs, which amounted to EUR26 billion. Assets held by IFs also rose in value by EUR12 billion, driven by debt security prices;

Investor inflows to IFs were broadly based across most fund types, with equity funds benefiting from strong inflows of EUR7 billion, despite relative weakness in global equity prices;

IF portfolio allocations were weighted towards higher yielding debt securities in Q1 2014, predominately UK private sector debt and to a lesser extent euro area peripheral debt;

Broadly speaking, the outflows from euro area peripheral debt sect securities that occurred during the euro area debt crisis have been unwound.

Investment Funds resident in Ireland (IFs) expanded strongly once again in Q1 2014 and have more than trebled in size since Q2 2009. The net asset value of IFs amounted to EUR1,115 billion in Q1 2014, a 4 per cent increase from EUR1,070 billion at the end of 2013 and compared to EUR357 billion in Q2 2009. Net transactions inflows from investors were particularly strong in Q1 2014, amounting to EUR25.7 billion. All fund types benefitted from substantial inflows though, in percentage terms, inflows to hedge funds were strongest, at 3.5 per cent. There were strong inflows of around EUR7 billion into equity funds in Q1, despite equity prices performing weakly when compared to debt security prices. The assets held by IFs rose in value by EUR11.7 billion in Q1 2014, driven by positive revaluations in debt security holdings.

IF portfolio allocations illustrated a preference for higher yielding debt securities in Q1 2014, reflecting the broader pattern in global markets and some rebalancing towards European debt securities. In overall terms, IFs increased their debt security holdings by EUR15.6 billion compared to EUR8.1 billion in additional investment in equities, in terms of net transactions. Within debt securities, however, there was a distinct preference for higher yielding securities, with portfolio allocations concentrated in debt securities issued by the European private sector, in particular the UK. There was also strong investment in UK government debt and increased interest in euro area peripheral government debt. As shown in the table below, holdings of German government debt rose relatively weakly, while US Treasury holdings actually declined. Holdings of Spanish and Italian debt have now surpassed their levels before the euro area debt crisis.

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Source: ENP Newswire

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