This chapter looks at the trends in the Non-money Market Funds (non-MMF) Investment Funds sector (S.124) which consists of all collective investment schemes, except those classified in the MMF sector, which are principally engaged in financial intermediation. Their business is to issue investment fund shares or units which are not close substitutes for deposits, and, on their own account, to make investments primarily in financial assets, other than short-term financial assets, and in non-financial assets (usually real estate).
| (AF.2) Currency and Deposits | (AF.3) Debt Securities | (AF.4) Loans | (AF.5) Equity and Investment Fund Shares/Units | (AF.7) Financial Derivatives and Employee Stock Options | (AF.8) Other Accounts Receivable | Total | |
| 2007 | 10.482 | 148.155 | 0.335 | 303.656 | 10.061 | 1.288 | 473.977 |
| 2008 | 16.629 | 97.775 | 0.435 | 208.446 | 12.999 | 5.723 | 342.007 |
| 2009 | 20.112 | 150.08 | 0.377 | 261.261 | 11.87 | 16.353 | 460.053 |
| 2010 | 25.053 | 235.077 | 0.314 | 342.342 | 19.011 | 23.706 | 645.503 |
| 2011 | 44.891 | 357.381 | 16.278 | 346.224 | 19.198 | 34.675 | 818.648 |
| 2012 | 64.095 | 441.035 | 16.898 | 421.448 | 32.26 | 42.235 | 1017.97 |
| 2013 | 56.753 | 480.794 | 14.688 | 532.571 | 43.428 | 52.098 | 1180.332 |
| 2014 | 58.461 | 559.49 | 15.115 | 689.544 | 228.444 | 76.445 | 1627.499 |
| 2015 | 77.116 | 615.196 | 31.342 | 784.846 | 168.378 | 100.66 | 1777.538 |
| 2016 | 67.519 | 745.267 | 33.795 | 839.903 | 161.026 | 63.579 | 1911.089 |
Get the data: StatBank
| (AF.4) Loans | (AF.5) Equity and Investment Fund Shares/Units | (AF.7) Financial Derivatives and Employee Stock Options | (AF.8) Other Accounts Receivable | Total | |
| 2007 | 0.787 | 470.518 | 0 | 3.705 | 475.01 |
| 2008 | 2.316 | 329.67 | 10.168 | 7.804 | 349.958 |
| 2009 | 2.581 | 441.141 | 5.893 | 9.82 | 459.435 |
| 2010 | 3.899 | 604.102 | 10.14 | 27.507 | 645.648 |
| 2011 | 6.475 | 768.667 | 10.078 | 33.502 | 818.722 |
| 2012 | 22.463 | 931.751 | 34.911 | 29.225 | 1018.35 |
| 2013 | 37.032 | 1069.719 | 40.314 | 33.748 | 1180.812 |
| 2014 | 17.556 | 1275.172 | 220.448 | 121.204 | 1634.381 |
| 2015 | 37.558 | 1432.189 | 161.926 | 168.156 | 1799.829 |
| 2016 | 119.94 | 1589.253 | 153.592 | 55.581 | 1918.366 |
Get the data: StatBank
Figure 5.1 shows the trend in the balance sheet assets the Investment Funds sector. Total assets decreased in 2008 but show an increasing trend in the following years. From €342bn in 2008 the balance sheet increased five-fold in size to €1,911bn in 2016. The increase in financial assets since 2008 is mainly driven by Debt Securities (AF.3) and Equity and Investment Fund Shares/Units (AF.5). Together they compose approximately 83% of the total balance sheet in 2016. It should be noted that part of the increase over recent years is due to the reclassification of Money Market Funds (S.123) which led to some assets being redefined as Investment Funds (S.124).
Figure 5.2 shows the trend in total liabilities from 2007 onwards. It follows a similar pattern to total assets, decreasing slightly in 2008 and increasing year on year since then. This expansion is driven by Equity (AF.5) which grew from €471bn in 2008 to €1,589bn in 2016, comprising 83% of the total. The growth in Financial Derivatives and Employee Stock Options (AF.7) is partly due to changes in the reporting basis in 2014.
| 2007 | 2011 | 2016 | |
| Switzerland | 234.2177 | 330.844 | 656.306 |
| Germany | 984.422 | 1084.472 | 1856.88 |
| Denmark | 136.7131 | 190.8812 | 304.0543 |
| France | 1074.733 | 877.24 | 1337.773 |
| Ireland | 473.977 | 818.647 | 1911.089 |
| Italy | 71.388 | 142.475 | 298.251 |
| Luxembourg | 1973.3054 | 2079.902 | 3824.8972 |
| Netherlands | 87.673 | 481.027 | 792.894 |
| Sweden | 156.6433 | 173.0533 | 375.173 |
Get the data: Eurostat
Figure 5.3 highlights the total assets of Investment Funds for selected European countries. The assets of each country, except those of France, rose between 2007 and 2011. The size of the total financial assets of the above selected countries increased from 2011 to 2016 by at least 50%. The size of the Investment Fund sector in Ireland experienced a significant increase between 2007 and 2016.
In 2007 Luxembourg, France and Germany had the largest Investment Funds balance sheet in Europe. In 2016 Ireland’s Investment Fund sector was the second largest balance sheet after Luxembourg, followed by Germany with the third largest.
| Bonds | Equities | Hedge | Mixed | Real Estate | Other | |
| 2008 | 90.796 | 145.163 | 32.115 | 0 | 0 | 81.857 |
| 2009 | 114.809 | 208.852 | 48.735 | 0 | 0 | 86.233 |
| 2010 | 192.716 | 267.32 | 61.729 | 0 | 0 | 123.791 |
| 2011 | 333.962 | 261.496 | 74.554591 | 0 | 0 | 148.636 |
| 2012 | 427.807 | 309.042 | 100.365 | 0 | 0 | 181.538 |
| 2013 | 470.719 | 411.701 | 117.202 | 0 | 0 | 181.748 |
| 2014 | 579.37 | 522.629 | 186.277 | 184.145 | 10.698 | 68.709 |
| 2015 | 615.708 | 612.16 | 220.725 | 235.607 | 14.8 | 93.974 |
| 2016 | 632.397 | 632.378 | 161.928 | 230.232 | 18.609 | 262.816 |
Get the data: Central Bank of Ireland
Figure 5.4 shows the composition of Investment Funds in Ireland classified by fund type. The increase in the balance sheet of Investment Funds that are resident in Ireland is mainly driven by equity and bond funds. These funds together compose 65% of the total assets in 2016. From 2008 to 2010 equity funds constituted the largest share in the total stock which changed when bond funds increased to a larger share in 2011. Real-estate funds do not play a major role in the Irish Investment Fund sector.
| Outflows | Inflows | Net Income (right axis) | |
| 2007 | 18.96752026 | 18.79563398 | -171.88628 |
| 2008 | 17.044117445 | 16.248336754 | -795.780691 |
| 2009 | 9.144021743 | 8.751880916 | -392.140827 |
| 2010 | 11.470079097 | 11.273510332 | -196.568765 |
| 2011 | 11.80116763 | 11.484753948 | -316.413682 |
| 2012 | 14.464271435 | 13.82644774 | -637.823695 |
| 2013 | 16.21057093 | 15.777743097 | -432.827833 |
| 2014 | 24.368213182 | 23.934443833 | -433.769349 |
| 2015 | 27.763888982 | 27.551453959 | -212.435023 |
| 2016 | 32.563812592 | 32.107011452 | -456.80114 |
Figure 5.5 shows the portfolio investment income of Investment Funds in and out of Ireland. Portfolio investment income is the return on cross-border investments from investors who do not own a controlling stake in the entity in which they are investing.
The income is driven by dividends and interest. Income inflows decreased in 2008 and 2009 but have increased in every subsequent year. In 2016 income inflows stood at €32.1bn.
Income outflows consist of dividends. Outflows decreased in 2008 and 2009, which can be attributed to the financial crisis, however they have increased in 2016 to €32.6bn. For all years considered here, the Irish Investment Fund sector had a negative income. This is mainly due to capital gains paid out in income. In 2008 the net income fell to -€796m which increased in the years up to 2010, then fell again. It decreased between 2015 and 2016, however not to the same extent as 2008.
| Income on Equity (Dividends) | Income on Debt (Interest) | |
| 2007 | 4.188017478 | 14.607616502 |
| 2008 | 3.341710708 | 12.906626046 |
| 2009 | 2.145610864 | 6.606270052 |
| 2010 | 3.551273407 | 7.722236925 |
| 2011 | 3.68656699 | 7.798186958 |
| 2012 | 4.609775859 | 9.216671881 |
| 2013 | 5.135583483 | 10.642159614 |
| 2014 | 7.274810747 | 16.659633086 |
| 2015 | 8.530326919 | 19.02112704 |
| 2016 | 11.281275474 | 20.825735978 |
Figure 5.6 further describes the trend of income inflows. Income inflows comprise of income on equity and income on debt. In 2016 income inflows increased to €32bn, 65% of which came from interest. Because of increasing debt asset positions, investment funds in Ireland have earned more interest in recent years.
| Portfolio Investment Income of Investment Funds | Other Portfolio Investment Income | |
| 2007 | 45.6646358067004 | 54.3353641932996 |
| 2008 | 39.8507086459529 | 60.1492913540471 |
| 2009 | 34.2042441337336 | 65.7957558662664 |
| 2010 | 44.8809999997249 | 55.1190000002751 |
| 2011 | 48.6931300276926 | 51.3068699723074 |
| 2012 | 55.4497092030563 | 44.5502907969437 |
| 2013 | 61.585193414894 | 38.414806585106 |
| 2014 | 72.8333945195637 | 27.1666054804363 |
| 2015 | 74.893080572056 | 25.106919427944 |
| 2016 | 77.7238702973635 | 22.2761297026365 |
Figure 5.7 shows the share of the Portfolio Investment Income Inflows of Investment Funds in Ireland in the total portfolio investment income. In 2007 Investment Funds comprised 46% of the total Portfolio Investment Income Inflows which decreased in 2009 to 34%. Since then Income Inflows of Investment Funds increased to almost 78% of the total Portfolio Investment Income Inflows in 2016. The proportion of the other sectors in the Portfolio Investment Income Inflows decreased from approximately 54% in 2007 to 22% in 2016.
| USA | UK | Japan | France | Germany | Netherlands | Rest of the world | |
| 2016 | 33.15829217992 | 21.9053155715974 | 4.35835433599996 | 4.32107431877073 | 3.6618927344177 | 3.0924012829233 | 29.5026695763709 |
Get the data: StatBank
Figure 5.8 provides an insight into the composition of foreign securities held by Irish Investment Funds. In 2016 Investment Funds resident in Ireland held €1,467bn of foreign securities which constitute about 77% of their total financial assets. Together the UK, France, Germany and the Netherlands comprise about one third of the foreign held securities in Ireland. Securities issued in the USA also comprise approximately one third of the total held foreign securities in Ireland.
Go to next chapter >> Other Financial Corporations S.125, S.126, S.127
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