Rest of the World: International Portfolio Investment Holdings of Long-term Securities by CountryThese tables and charts provide monthly, country-level detail on international portfolio investment holdings of long-term securities, complementing the quarterly, aggregated data reported in table L.133 Rest of the World of the Financial Accounts of the United States. Portfolio investment refers to ownership by one country's residents of less than 10 percent of a business in another country. The tables show foreign residents' holdings of U.S. long-term securities as well as U.S. residents' holdings of foreign long-term securities by country. In addition, a supplemental table provides information on foreign residents' holdings of U.S. short-term Treasury securities. Note that only selected countries are shown in the tables. However, the full list of countries are available in historical data. The charts consist of world and regional-level heat maps showing the cross-sectional distribution of the latest total portfolio holdings, as well as time-series graphs of holdings by security type. Additional detail on this project is documented in an associated FEDS Note: International Portfolio Investment Holdings of Long-term Securities in the Enhanced Financial Accounts. ChartsFigure 1: World Map of Foreign Residents' Holdings of Total U.S. Long-term Securities: PDF | HTML Figure 2: World Map of U.S. Residents' Holdings of Total Foreign Long-term Securities: PDF | HTML Figure 3: Foreign Residents' Holdings of U.S. Long-term Securities by Security Type: PDF | HTML Figure 4: U.S. Residents' Holdings of Foreign Long-term Securities by Security Type: PDF | HTML Historical DataTable 1: Foreign Residents' Holdings of Total U.S. Long-term Securities by Country: CSV | Data Dictionary Table 1a: Foreign Residents' Holdings of U.S. Long-term Treasury Securities by Country: CSV | Data Dictionary Table 1b: Foreign Residents' Holdings of U.S. Long-term Agency Bonds by Country: CSV | Data Dictionary Table 1c: Foreign Residents' Holdings of U.S. Long-term Corporate and Other Bonds by Country: CSV | Data Dictionary Table 1d: Foreign Residents' Holdings of U.S. Corporate Stocks by Country: CSV | Data Dictionary Table 1e: Memo: Foreign Residents' Holdings of U.S. Short-term Treasury Securities by Country: CSV | Data Dictionary Table 2: U.S. Residents' Holdings of Total Foreign Long-term Securities by Country: CSV | Data Dictionary Table 2a: U.S. Residents' Holdings of Foreign Long-term Bonds by Country: CSV | Data Dictionary Table 2b: U.S. Residents' Holdings of Foreign Corporate Stocks by Country: CSV | Data Dictionary DocumentationInformation on monthly international portfolio investment holdings comes from Aggregate Holdings of Long-term Securities by U.S. and Foreign Residents - (Form SLT) data collected through the Treasury International Capital (TIC) reporting system. Foreign residents' holdings of U.S. long-term securities are broken down into four types: Treasuries, agency bonds, corporate and other bonds, and corporate stocks. Note that corporate and other bonds include municipal securities. Supplemental data on foreign holdings of short-term Treasury securities is also available. U.S. residents' holdings of foreign long-term securities are broken down into two types: bonds and corporate stocks. All securities are reported at current market value. The countries that belong to various "other" categories in the tables section are shown separately in the historical data section with the label "other" (for example, "Other Africa" and "Other Africa; Algeria"). Last Update: June 17, 2022 ← Concepts and Definitions The CPIS dataset can be found here. The link to Chapter 6 of the BPM6 is located
here. Securities and alternative foreign financial assets that are passively held by a foreign investor What is Foreign Portfolio Investment (FPI)?Foreign portfolio investment (FPI) involves an investor purchasing foreign financial assets. The transaction of foreign securities generally occurs at an organized formal securities exchange or through an over-the-counter market transaction.  Foreign portfolio investment is becoming increasingly more common as a means of portfolio diversification. Often, FPIs consist of securities and alternative foreign financial assets that are passively held by a foreign investor. Summary
Who Can Make Foreign Portfolio Investments?Foreign portfolio investing is popular among several different types of investors. Common transactors of foreign portfolio investment include:
Benefits of Foreign Portfolio InvestmentThe primary benefits of foreign portfolio investment are: 1. Portfolio diversificationForeign portfolio investment provides investors with an easy opportunity to diversify their portfolio internationally. An investor would diversify their investment portfolio to achieve a higher risk-adjusted return, which is ultimately done to help generate alpha. 2. International creditInvestors may be able to access an increased amount of credit in foreign countries, allowing the investor to utilize more leverage and generate a higher return on their equity investment. 3. Access to markets with different risk-return characteristicsIf investors are seeking out greater returns, they must be willing to take on greater risk. Emerging markets can offer investors a different risk-return profile. 4. Increases the liquidity of domestic capital marketsAs markets become more liquid, they become deeper and broader, and a wider range of investments can be financed. Savers can invest with the assurance that they will be able to manage their portfolio or sell their financial securities quickly if they need access to their savings. 5. Promotes the development of equity marketsIncreased competition for financing will lead to the market rewarding superior performance, prospects, and corporate governance. As the market’s liquidity and functionality develop, equity prices will become value-relevant for investors, ultimately driving market efficiency. Risks of Foreign Portfolio Investment (FPI)The primary risks faced by a foreign portfolio investor are: 1. Volatile asset pricingAcross international financial markets, some are riskier than others. For example, consider the Deutscher Aktienindex (DAX). The DAX is a stock market index of 30 major German companies trading on the Frankfurt Stock Exchange. The DAX is historically more volatile than the S&P 500 Index. 2. Jurisdictional riskJurisdictional risk can result from investing in a foreign country. For example, if a foreign country that you were invested in drastically changes its laws, it could result in a material impact on the investment’s returns. Moreover, many countries struggle with financial crime, such as money laundering. Investing in countries where money laundering is prevalent increases the jurisdictional risk faced by the investor. Financial Assets for Foreign Portfolio InvestmentsThe typical financial assets that can be purchased through foreign portfolio investment include equities, bonds, and derivative instruments. These securities can be purchased for many reasons; however, generally, foreign portfolio investment is positively influenced by high rates of return and reduction of risk through geographic diversification. Policies for Foreign Portfolio InvestmentForeign portfolio investment is inherently volatile, and rigorously regulated financial markets are needed to manage the risk effectively. Furthermore, the financial system must be capable of identifying and mitigating risks for prudent and efficient allocation of foreign or domestic capital flows. Economic growth and development are enabled by successful financial intermediation and the efficient allocation of credit. Financial systems can maintain their health through the identification and management of business risks. Moreover, the financial system must also withstand economic shocks. Related ReadingsThank you for reading CFI’s guide on Foreign Portfolio Investment (FPI). To keep learning and developing your knowledge of financial analysis, we highly recommend the additional resources below:
What do you mean by international portfolio investment?What Is an International Portfolio? An international portfolio is a selection of stocks and other assets that focuses on foreign markets rather than domestic ones. If well designed, an international portfolio gives the investor exposure to emerging and developed markets and provides diversification.
How would you characterize the benefits of international portfolio investment?The primary benefits of foreign portfolio investment are:. Portfolio diversification. ... . International credit. ... . Access to markets with different risk-return characteristics. ... . Increases the liquidity of domestic capital markets. ... . Promotes the development of equity markets.. What are the characteristics of portfolio?The 7 attributes of a good investment portfolio. Risk averse. Your portfolio should not expose you to any more risk than is necessary to meet your objectives. ... . Cost efficient. A good portfolio achieves its objectives at the lowest possible cost. ... . Risk efficient. ... . Tax efficient. ... . Simple. ... . Transparent. ... . Easy to manage.. What are the 3 types of investment portfolios?Portfolios come in various types, according to their strategies for investment.. Growth portfolio. From the name itself, a growth portfolio's aim is to promote growth by taking greater risks, including investing in growing industries. ... . Income portfolio. ... . Value portfolio.. |
