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Funds in Ireland rise to E1.15 trillion

Tuesday, July 01 12:52:15

The net asset value of investment Funds resident in Ireland (IFs) expanded by over 4pc in the first three months of this year 2014 to E1,115 billion (E1.15 trillion) from E1,070 billion at the end of 2013.

The Central Bank statistics also show that the Irish funds industry has more than trebled in size since the second quarter of 2009 on a net asset value basis.

The performance in Q1 of this year was largely driven by investor inflows into IFs, which amounted to E26 billion.

Assets held by IFs also rose in value by E12 billion, driven by debt security prices, it said.

All fund types benefitted from substantial inflows though, in percentage terms, inflows to hedge funds were strongest, at 3.5 per cent. There were strong inflows of around E7 billion into equity funds in Q1, despite equity prices performing weakly when compared to debt security prices. The assets held by IFs rose in value by E11.7 billion in Q1 2014, driven by positive revaluations in debt security holdings.

IF portfolio allocations illustrated a preference for higher yielding debt securities in Q1 2014, reflecting the broader pattern in global markets and some rebalancing towards European debt securities.

In overall terms, IFs increased their debt security holdings by E15.6 billion compared to E8.1 billion in additional investment in equities, in terms of net transactions.

Within debt securities, however, there was a distinct preference for higher yielding securities, with portfolio allocations concentrated in debt securities issued by the European private sector, in particular the UK.

There was also strong investment in UK government debt and increased interest in euro area peripheral government debt.

Holdings of German government debt rose relatively weakly, while US Treasury holdings actually declined.

Holdings of Spanish and Italian debt have now surpassed their levels before the euro area debt crisis.