Foreign investment funds account for larger share in employment pension schemes’ securities investments

Statistics Monday 12 August 2019, 1:00 PM

At the end of June 2019, employment pension schemes1 had EUR 181 bn worth of investments in securities2, most of which (81%) were held in foreign securities. Backed by positive equity market developments, employment pension schemes’ securities investments grew in January–June 2019 by EUR 13,2 bn.

Employment pension schemes’ debt security investments down by EUR 1.9 bn in January–June 2019

At the end of June 2019, employment pension schemes held EUR 36.4 bn of debt securities3, which is EUR 0.3 bn less than in December 2018. The value of debt security holdings grew in January–June by EUR 1.5 bn. In net terms, however, debt securities were sold in the amont of EUR 1.9 bn. At end-June 2019, the majority of debt security investments was in foreign government bonds (EUR 16.1 bn). The largest share was in US government bonds (EUR 3.3 bn), followed by French (EUR 2.5 bn), German (EUR 1.8 bn) and Italian and Belgian (EUR 1.0 bn, both) government bonds. Investments in Finnish government bonds at end-June totalled EUR 0.7 bn.

Employment pension schemes also held EUR 7.0 bn of debt securities issued by non-financial corporations4 (Finnish companies, EUR 2.5 bn) and EUR 12.6 bn of debt securities issued by other sectors5.

Employment pension schemes’ holdings of investment fund shares totalled EUR 106.7 bn at end-June 2019

Employment pension schemes’ investments in funds grew in January–June 2019 by EUR 9.9 bn. Over the same period, the value of fund shares increased by EUR 7.4 bn, and employment pension schemes made EUR 2.6 bn of new investments in investment funds.

A significant proportion (EUR 98.7 bn) of employment pension schemes’ fund investments were in foreign funds. Of these, investment funds registered in Ireland, the United States, Luxembourg and the Cayman Islands accounted for 89%.

At the end of June 2019, employment pension schemes also held EUR 8 bn of shares of Finnish investment and private equity funds. The majority of these investments was in bond (EUR 3.4 bn) and equity funds (EUR 2.1 bn).

The value of listed shares held by employment pension schemes up by EUR 3.2 bn in January–June 2019

In January–June 2019, employment pension schemes invested a net EUR 0.1 bn of new capital in non-financial corporations’ listed shares. At the end of June 2019, employment pension schemes’ holdings of listed shares of Finnish companies totalled EUR 16.3 bn and of unlisted shares EUR 3.4 bn. Holdings of foreign companies’ listed shares totalled EUR 13.2 bn. The majority (EUR 1.8 bn) of investments in foreign shares was in listed shares of US companies. At end-June 2019, employment pension schemes held listed shares of Nordic6 companies amounting to EUR 2.1 bn, of which most (EUR 1.4 bn) consisted of listed shares of Swedish companies.

1 The news release only covers statutory employment pension schemes (S.13141) and excludes data on pension funds (S.129) and savings for pension purposes via insurance corporations (S.128).
2 Investments in shares, bonds and fund shares.
3 The majority was in bonds.
4 Sector S.11.
5 Sectors other than central government (S.1311) and non-financial corporations (S.11).
6 Sweden, Denmark, Norway and Iceland.

Finnish deposits and investments (EUR million), 2019Q2

  All Households Employment pension schemes
  stock (flows) change in valuation stock (flows) change in valuation stock (flows) change in valuation
Finnish investments            
Listed shares 182 732 1 267 36 233 -228 29 475 182
  (-2 314)   (783)   (402)  
- in domestic shares 124 255 537 33 241 -212 16 286 23
  (818)   (759)   (373)  
             
Bonds 197 642 1 855 2 431 12 36 384 576
  (-3 010)   (-82)   (-910)  
- in domestic bonds 69 893 677 1 584 7 4 308 60
  (-425)   (-79)   (-283)  
             
Fund shares            
Domestic investment funds 95 185 1 581 23 131 396 5 936 88
  (1 322)   (399)   (59)  
             
Foreign funds            
  138 982 1 664 2 368 37 98 680 786
  (2 171)   (38)   (1 686)  
Finnish bank deposits            
Transaction accounts            
  147 672 -46 81 064 -4 5 298 -5
Other deposits (1 507)   (2 655)   (88)  
  48 507 -2 12 863 -0 -* -*
  (-615)   (55)   -*  

*confidential

For further information, please contact:

Antti Alakiuttu, tel. +358 9 183 2495, email: antti.alakiuttu(at)bof.fi,
Markus Aaltonen, tel. +358 9 183 2395, email: markus.aaltonen(at)bof.fi.

Related statistical data and graphs are also available on the Bank of Finland website: https://www.suomenpankki.fi/en/Statistics/saving-and-investing.

The next news release on saving and investing will be published at 1 pm on 11 November 2019.