Investment by institutional investors falls further

08/09/2003 10:00

Investment by pension funds, insurance companies and investment institutions fell by 57 billion euro in 2002, continuing the downward trend since 1999.

Investment by institutional investors and GDP

Investment by institutional investors and GDP

Fewer shares, more bonds

An important part of the decline can be explained by falling share prices. The sharp fall in share prices has reduced the proportion of shares in the investment portfolios of institutional investors in 2002 from 42 to 37 percent. The influence of the lower share prices is partly compensated by new acquisitions.

Institutional investors now have more bonds in their portfolios, bonds accounted for 36 percent of the total institutional portfolio in 2002, up from 31 percent in 2001.

Private loans fall further

The reduction in private loans is also reflected in the figures for 2002. The share of these loans in the portfolio fell to 8 percent. In 1990 it was still as high as 45 percent.

The share of loans to central government in the total loans fell from 40 percent in 1990 to 4 percent in 2002. This is related to the fact that the government has stopped taking out private loans to finance its spending.

Dutch and foreign shares

Larger share for foreign investment

The increasing trend of investing abroad continued in 2002. Foreign investment accounted for 57 percent of the investment portfolio in 2002, 3 percent points more than in 2001: 6 percent points more foreign bonds and 3 percent points fewer foreign shares and real estate.

Dutch and foreign bonds

Dutch and foreign bonds

More international

These trends are also reflected in a substantially more international share and bond portfolio. On 31 December 2002 foreign bonds accounted for 76 percent of the bond portfolio. In 1999 this was still only 52 percent.

The share portfolio too has become more international since 1999: The proportion of foreign shares rose from 67 percent in 1999 to 74 percent in 2002.

John Gebraad