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BANK OF FINLAND
Monthly news
9 May 2012

Investment funds’ financial statement data 2011

 

Investment funds reported losses of EUR 5.0 billion for 2011

 
In 2011, the total result of investment funds registered in Finland deteriorated to a loss of EUR 5.0 billion. Total results of investment funds had been positive in the two previous years. However, the result was not as weak as in 2008, when investment funds reported losses of no less than EUR 12.7 billion. Only 26% of the Finnish investment funds reported a positive result for 2011, whereas the proportion had been 91% one year earlier. The negative total result of investment funds was mainly due to a sharp drop in equity prices. 

Equity funds’ share of the aggregate loss of investment funds was by far the largest at EUR 4.8 billion. Equity funds were also the most significant fund category1 in terms of fund capital in 2011, so their impact on the total result of investment funds was large. Mixed funds also suffered from weak market developments and reported total losses of EUR 0.4 billion for the financial year. Only bond funds and money market funds reported positive total results for the financial year.

Mainly the negative result was formed by unrealised value depreciation of investment funds’ security holdings, which was reported at a total of EUR 6.2 billion in 2011. In addition, the result of the financial year was weakened by investment funds’ increased expenses. Expenses totalled EUR 0.8 billion in 2011. The increased expenses were particularly attributable to other expenses (EUR 0.2 billion), which continued growing in the same way as in 2010.2  Fees paid to fund management companies and custodians, which make up most of all investment fund expenses, remained unchanged (EUR 0.6 billion) compared to 2010.

The deterioration of the result of the financial year was in turn dampened by increased interest income, dividend income and income from fund shares. The reported interest income amounted to more than EUR 0.9 billion. Interest income was at the highest level in three years in 2011. Most of the reported interest income was recognised under bond funds (EUR 0.6 billion) and money market funds (EUR 0.2 billion).

Net profit of investment funds, 2000-2011

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        Investment funds' dividend income and income from fund shares, 2007-2011
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Dividend income and income from fund shares (EUR 0.6 billion) totalled at EUR 0.1 billion above the 2010 level. The increased dividend income and income from fund shares were largely based on the dividends paid out in 2011 for the excellent 2010 result. The bulk of dividend income and income from fund shares received by investment funds (EUR 0.6 billion) went to equity funds. In addition, the result of the financial year was improved by gains on disposal of securities amounting to an annual net amount of EUR 0.4 billion.
 
In 2011, the aggregate fund capital of Finnish investment funds shrank by EUR 6.5 billion and amounted to EUR 55.7 billion at year-end. Most of the fund capital contraction (77%) was due to the loss in the financial year. Furthermore, investors redeemed fund capital worth a net amount of EUR 1.4 billion during the year.3  Investment funds distributed profits of EUR 0.1 billion to their shareholders, as in 2010.
 
At the end of 2011, there were 519 operating investment funds registered in Finland, administered by 35 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 According to a Guideline of the European Central Bank (ECB/2007/9), investment funds are classified into six statistical types: equity funds, bond funds, mixed funds, hedge funds, real estate funds and money market funds.
2 Other expenses include, among other things, interest expenses and exchange rate losses due to converting foreign currency financial items into euro.
3 In the statistics on financial statements of investment funds, subscriptions of investment fund shares include smaller adjustments due to other changes.
 
Source: Financial statements of investment funds 2011, Bank of Finland.
 
 
 

Income statement items for investment funds registered in Finland, by fund type, 2011, EUR m

Equity funds Bond funds Mixed funds Real   estate funds Hedge funds Money market funds Total
RETURNS AND REVALUATIONS -4 246 197 -358 -20 17 193 -4 217
Net income from securities -4 913 -377 -410 -26 -76 -58 -5 860
Capital gains 6 683
Capital losses -6 295
Unrealised value changes -5 118 -509 -465 -24 -31 -99 -6 247
Net income from derivative contracts -40 -25 -41 0 -9 -1 -117
Capital gains 344 540 389 1 126 12 1 412
Capital losses -361 -518 -416 -1 -127 -13 -1 436
Unrealised value changes -23 -47 -14 0 -8 0 -92
Dividend income and income from fund shares 557 7 47 5 5 0 621
Interest income 8 569 32 0 86 247 941
Other income 142 24 14 0 11 6 197
EXPENSES -514 -136 -47 -2 -71 -38 -806
Fees1 -357 -122 -43 -2 -21 -36 -581
Other expenses2 -156 -14 -3 0 -49 -2 -225
NET PROFIT / LOSS FOR THE FINANCIAL YEAR -4 760 62 -405 -22 -54 155 -5 024
 

Balance sheet items for investment funds registered in Finland, by fund type, 2011, EUR m

Equity
funds
 Bond funds
Mixed funds
Real estate
funds
Hedge
funds
 Money market funds  Total
TOTAL ASSETS 19 325 19 458 4 610 125 1 417 11 425 56 360
Securities at market value 18 595 18 121 4 253 120 1 098 10 926 53 204
Receivables3 730 1 246 357 5 319 499 3 157
TOTAL LIABILITIES 19 325 19 458 4 610 125 1 417 11 425 56 360
Fund value 31 Dec 19 186 19 121 4 573 125 1 367 11 354 55 726
Net profit / loss for the financial year -4 760 62 -405 -22 -54 155 -5 024
Profit distribution -49 -77 -6 -1 0 -7 -140
Redemptions of IF shares -11 669 -11 461 -927 -63 -994 -11 596 -36 710
Subscriptions of IF shares4 10 276 10 266 1 058 56 1 110 12 583 35 348
Fund value 1 Jan 25 387 20 332 4 854 156 1 305 10 218 62 252
Current liabilities5 140 337 37 0 50 70 635
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:
Johanna Honkanen, tel. 010 831 2992, email: johanna.honkanen(at)bof.fi​
Hermanni Teräväinen, tel. 010 831 2172, email: hermanni.teravainen(at)bof.fi