BANK OF FINLAND
Monthly news
8 Jun 2011

Investment funds' financial statement data 2010

Investment funds reported profits of EUR 7.1 billion for 2010

 
Investment funds registered in Finland reported total profits of EUR 7.1 billion for the financial year 2010. Of domestic investment funds, as much as 91 % recorded positive results1. Strong profits reflected continuing favourable developments in the securities markets. Even so, the aggregate profit of investment funds for 2010 was EUR 1.6 billion less than the record profit posted in 2009 (EUR 8.7 billion).

Every fund category reported profits for the financial year under review2, but only money market funds posted higher total profits than in 2009. Equity funds’ share of the aggregate profit of investment funds was still by far the largest, totalling EUR 4.8 billion. Equity funds also led the fund categories in 2010 in terms of fund assets. The profits of bond funds amounted to EUR 1.2 billion; for mixed funds the total was EUR 0.5 billion.

Investment fund profits mainly comprised capital gains from securities transactions and unrealised value appreciation of securities holdings3. In the course of 2010, investment funds recorded EUR 5.1 billion worth of capital gains and EUR 2.8 billion worth of capital losses, resulting in a positive net contribution of EUR 2.4 billion to total profits from securities transactions. Unrealised value appreciation for securities holdings was reported at EUR 4.0 billion. 

The bulk of dividend income from shares and income from fund shares received by investment funds (EUR 521 million) went to equity funds. Overall dividend income from shares and income from fund shares increased by EUR 124 million, due mainly to an increase in the shareholdings of investment funds. Of interest income (EUR 790 million), the bulk was recorded by bond funds and money market funds.

          Net profit of investment funds, 2000-2010Chart_113306.png

          Investment fund profits by fund type, 2009-2010Chart_153859.png

By contrast, the result for the financial year was impaired by the fact that income from derivatives contracts turned into a loss of EUR 153 million and fees paid to fund management companies and custodians increased. Fees paid in 2010 totalled EUR 592 million, compared to EUR 417 million in 2009. The item is composed mainly of administrative fees paid to fund management companies.
 
In the course of 2010, the total assets of investment funds grew by 14 % to EUR 62.2 billion. The EUR 7.6 billion growth in total assets was almost entirely due to profits for the financial year. There was only EUR 0.6 billion worth of net inflows of new capital from investors into domestic investment funds4. Investment funds distributed profits of EUR 138 million to their shareholders.
 
At the end of 2010, there were 510 operating investment funds registered in Finland, administered by 34 fund management companies.
 
The Bank of Finland annually publishes a statistical release ‘Financial statements of investment funds’. The data are collected directly from investment funds registered in Finland. The publication also relies on data derived from monthly balance sheet reporting by investment funds to the Bank of Finland.
 
1 At the end of 2010, there were 510 operating investment funds registered in Finland, of which 465 reported positive results for the financial year. In 2009, 92 % of investment funds had reported positive results.
2 According to the Guideline of the European Central Bank (ECB/2007/9), investment funds are statistically classified into six different types: equity funds, bond funds, mixed funds, hedge funds, real estate funds and money market funds.
3 Of investment fund profits, 80 % consisted of net income from securities (84 % in 2009). Between fund categories, however, there are differences due to investment strategies. For bond funds and money market funds, for example, the relative share of net income from securities is smaller and that of interest income larger.
4 In the financial statements of investment funds statistics, subscriptions of investment fund shares include smaller adjustments due to other changes.
 
Source: Financial statements of investment funds 2010, Bank of Finland.

SITI_taulukot_2010_en.xlsFinancial statements of investment funds, 2010 and key figures 1995–2010.xls

Key financial figures of fund management companies, 2008-2010 (Financial Supervisory Authority)

 

Income statement items for investment funds registered in Finland, by fund type, 2010,
EUR m

Equity funds
Bond funds Mixed funds Real estate funds Hedge funds Investment funds total Money market funds   Total
RETURNS AND REVALUATIONS 5 243 1 410 581 28 112 7 375 540 7 915
Net income from securities 4 528 853 524 23 77 6 005 346 6 351
Capital gains 2 661 959 235 5 1 009 4 869 279 5 148
Capital losses​ -1 092 -409 -90 -13 -967 -2 572 -189 -2 761
Unrealised value changes 2 959 303 378 32 36 3 708 257 3 964
Net income from derivative contracts -23 -90 -38 -1 0 -152 -1 -153
Capital gains 494 453 266 1 294 1 508 3 1 511
Capital losses -524 -561 -309 -2 -305 -1 702 -4 -1 706
Unrealised value changes 8 18 5 0 11 42 0 42
Dividend income and income from fund shares 468 5 36 5 7 521 0 521
Interest income 7 541 32 0 21 601 189 790
Other income 264 101 27 1 6 400 6 406
EXPENSES -490 -168 -50 -2 -33 -743 -39 -782
Fees1 -369 -122 -44 -2 -18 -554 -38 -592
Other expenses2 -120 -46 -7 0 -15 -188 -1 -190
NET PROFIT / LOSS FOR THE FINANCIAL YEAR 4 754 1 242 531 26 80 6 632 500 7 133
 

Balance sheet items for investment funds registered in Finland, by fund type, 2010, EUR m

Equity funds
Bond funds
Mixed funds
Real estate funds Hedge funds
Investment funds total
Money market funds  Total
TOTAL ASSETS 25 616 20 587 4 851 156 1 651 52 862 10 295 63 157
Securities at market value 24 721 19 496 4 591 151 1 083 50 042 9 948 59 990
Receivables3 895 1 091 261 5 569 2 820 346 3 167
TOTAL LIABILITIES 25 616 20 587 4 851 156 1 651 52 862 10 295 63 157
Fund value 31 Dec 25 384 20 322 4 836 156 1 308 52 006 10 218 62 223
Net profit / loss for the financial year 4 754 1 242 531 26 80 6 632 500 7 133
Profit distribution -39 -81 -7 -1 -1 -129 -9 -138
Redemptions of IF shares -11 415 -11 415 -955 -37 -1 116 -24 937 -12 905 -37 843
Subscriptions of IF shares4 12 383 13 279 1 192 32 654 27 540 10 910 38 450
Fund value 1 Jan 19 701 17 297 4 075 135 1 692 42 899 11 722 54 622
Current liabilities5 232 265 16 1 344 856 77 933
1 includes fees paid to fund management companies and custodians
2 includes interest expenses and other expenses
3 includes accounts receivable, other receivables, accrued income, as well as cash and bank deposits
4 includes adjustments related to mergers and acquisitions, and other changes
5 includes accounts payable, accrued expenses, other liabilities
 
More information: 
Hermanni Teräväinen, tel. 010 831 2172, email: hermanni.teravainen(at)bof.fi
Johanna Honkanen, tel. 010 831 2146, email: johanna.honkanen(at)bof.fi​