Statistics 9 February 2023 10:00 AM

Investment fund capital decreased materially in 2022

After record growth in 2021, the fund capital of Finnish investment funds[1] decreased materially in 2022.

After record growth in 2021, the fund capital of Finnish investment funds[1] decreased materially in 2022. At the end of 2022, the fund capital stood at EUR 137.5 billion, over EUR 25 billion less than a year earlier. The reduction in the fund capital was mainly due to the depreciation of securities held by investment funds, but the funds also had a large volume of redemptions.

In 2022, the value of investment fund capital depreciated by EUR 20.2 billion[2], and redemptions from the funds amounted to EUR 5 billion. The capital of the largest types of funds – equity and bond funds – decreased by roughly the same amount in 2022 (over EUR 12 billion). The decrease was due to the rise of interest rates and depreciation of equity prices. At the end of December 2022, the fund capital of equity funds amounted to EUR 58.3 billion, compared to EUR 52.6 billion for bond funds. Equity and bond funds together account for 81% of investment funds’ total fund capital. The next largest fund types are mixed funds and real estate funds.

In 2022, clearly the largest redemptions were made from bond funds. During the year, new subscriptions in bond funds amounted to EUR 18.5 billion and redemptions to EUR 24.1 billion. Hence, net redemptions from bond funds amounted to EUR 5.6 billion. Net redemptions from equity funds totalled EUR 1.1 billion. In 2022, the largest new investments[3] were made in real estate funds, exceeding redemptions by EUR 750 million. The largest redemptions (EUR 1.6 billion) from Finnish investment funds in 2022 were made by non-financial corporations, whereof Finnish companies accounted for 65%.

Majority of the funds’ investments were targeted abroad

At the end of December 2022, out of Finnish investment funds’ aggregate investments of EUR 141.9 billion, 32% was allocated to Finland and 68% abroad. The majority (39%) of domestic investments were inter-fund investments. 27% of the investments were made directly in Finnish non-financial corporations’ equities.

The largest foreign investments were made in listed equities (44%) and bonds (33%). The largest (45%) foreign equity investments were allocated to US equities. The highest share (20%) of foreign bonds held by the investment funds were issued by Swedish residents. As a whole, the largest foreign investments were made in the United States (EUR 23.2 billion), Luxembourg (EUR 13.3 billion) and Sweden (EUR 11.6 billion).

Finnish households are the largest owner of investment funds

At the end of December 2022, Finnish households had direct holdings of EUR 30.0 billion in Finnish investment funds, which is 13 % less than a year earlier. A large amount of Finnish households’ assets is also channelled to domestic investment funds through unit-linked policies with insurance corporations. In the Bank of Finland's investment fund statistics, these are shown as insurance institutions’ investments.

Finnish deposits and investments (EUR million), 2022Q4
	All		Households		Employment pension schemes
	stock (flows)	change in valuation	stock (flows)	change in valuation	stock (flows)	change in valuation
Finnish investments
Listed shares	208 791	12 214	46 373	3 777	34 529	1 868
	(-555)		(100)		(-477)
- in domestic shares	131 851	10 813	41 489	3860	17 181	1 488
	(141)		(56)		(60)

Bonds	228 072	-2 247	1 610	60	27 578	-477
	(5 612)		(424)		(2 235)
- in domestic bonds	103 845	-1 073	851	45	3 777	-30
	(1 323)		(230)		(396)

Fund shares
Domestic investment funds	106 027	2 124	29 991	719	5 047	135
	(-136)		(24)		(-115)

Foreign funds	176 562	-4 819	5 281	73	121 534	-4 929
	(2 147 )		(161)		(1 414)

Finnish bank deposits
Overnight deposits (transaction accounts)	187 433	-259	101 909	-26	7 075	-21
	(132)		(-2 559)		(180)
Other deposits	15 548	-17	9 884	-3	-*	-*
	(2 144)		(823)		-*