Business Irish

Friday 30 September 2016

Ireland-based investment funds worth €1.5 trillion in Q2, Central Bank says

Published 23/09/2016 | 02:30

Central Bank headquarters on Dame Street in Dublin.
Central Bank headquarters on Dame Street in Dublin.

The net asset value of investment funds resident in Ireland hit almost €1.5 trillion during the second quarter of the year, according to the Central Bank.

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It said it represents a 4.3pc, or €61bn rise, on the previous quarter. A strong quarter for global shares accounted for €11bn of the rise, following revaluations of equity holdings of investment funds domiciled here.

Total revaluations - which included debt holdings - resulted in a €39bn rise, while the amount of money that flowed to investment funds here hit €22bn in the three months to the end of June. The total, as opposed to net assets, of investment funds resident in Ireland in the period amounted to €1.78 trillion.

"Over the second quarter, investment funds experienced a positive revaluation of 3pc overall, although this was higher for bond funds at 6.8pc," according to the Central Bank.

"Equity funds were broadly flat over the quarter with a positive revaluation of just 1pc. Hedge funds, in contrast, reported a negative revaluation of 1.7pc during the quarter," it said.

The bank said the €11bn positive revaluation in equity holdings of investment funds were generated "despite global equity and currency market fluctuations towards the end of the quarter following the Brexit vote".

Shares issued by US non-financial corporations experienced a positive revaluation of €8bn, it said. But holdings of shares issued by UK non-financial corporations recorded a negative revaluation of €667m.

Overall debt holdings saw a 9pc rise over the quarter, driven by transaction inflows of €33.5bn, according to the data.

Investment funds in Ireland held €174bn of UK government debt at the end of the quarter, accounting for 51pc of total government debt holdings in the period.

Inflows of €12bn to UK government bonds were recorded in the quarter, continuing a positive trend in prior quarters.

Sterling-denominated investment funds account for 21pc of the Irish-domiciled funds in the period. Overall, net transactions of €7.3bn flowed into these funds during the quarter, the bank said.

However, sterling-denominated equity and hedge funds, which between them accounted for 28pc of the total sterling-denominated funds in the period, reported a €974m net transaction outflow during the quarter.

As at end of the second quarter, holdings by households (including non-profit institutions), and non-financial corporations, accounted for 9pc of the total net asset value of Ireland-domiciled investment funds, of which just 1pc was reported on a first counterparty basis as been held by these entities in Ireland. Holders are reported on a first counterparty basis. Therefore, holdings by households may actually be higher, as some of those holdings are held in nominee accounts within banks and or other financial intermediaries.

Irish Independent

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