Inter-fund investments increased aggregate fund capital

The aggregate fund capital of investment funds registered in Finland grew by EUR 1.9 bn in the second quarter of 2015, to EUR 98.6 bn at the end of June. Investments in funds increased the fund capital by EUR 4.3 bn, while valuation changes reduced it by EUR 2.4 bn.

Most of the investments in funds, about EUR 2.5 bn, was made by other investment funds registered in Finland. Thus the growth of total fund capital during the quarter was largely endogenous. Overall, mutual holdings of Finnish investment funds represented 14 % of total fund capital at the end of June.

Of other investor sectors, insurance corporations clearly channelled the most capital into Finnish funds, EUR 1.6 bn on net. Most investments in funds by insurance corporations are related to investments in unit-linked insurance policies, where households are the actual risk-bearing investors. In the recent quarter, households' direct fund investments amounted EUR 42 mn on net.

Fund capital of Finnish investment funds by owner sector*

Broad decline in investment values

The values of Finnish investment funds' investment assets declined in every fund category in the second quarter. The price changes of investments amounted to a negative EUR 2.2 bn, in addition to which euro appreciation reduced the value of investments denominated in other currencies by EUR 0.8 bn.

Equity prices dropped, particularly in June, and as a result the valuation changes of Finnish investment funds' shareholdings were negative in nearly all market areas. Overall, valuation changes reduced Finnish funds' shareholdings by EUR 1.3 bn, or 3.8%, in the second quarter.

Due to valuation changes, funds' security holdings shrank by about EUR 1 bn, or 2.7%, in the second quarter. The prices of debt securities issued in the euro area, in particular, and in other countries declined during the quarter, while the interest rates on new government bonds were rising. At the end of June, Finnish funds held government bonds totalling EUR 8 bn, of which Italian, EUR 1.4 bn, German, EUR 1.2 bn, and Spanish, EUR 1 bn.

Key statistical data on investment funds registered in Finland, preliminary data

• Breakdown of investment funds’ fund-share liability by sector of holder
• Securities-based assets of investment funds by area
• Securities-based assets of investment funds by instrument, area and sector

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