OREANDA-NEWS.
  • The Central Bank today publishes a new quarterly statistical release on money market funds resident in Ireland. This follows on from the introduction of security by security by security reporting  in December 2014.
  • The net asset value of money market funds (MMFs) resident in Ireland grew by  4 per cent from December 2014 to June 2015, rising to €402,295 million from €387,089 million.
  • Total assets held by MMFs in June was €405,415 million. Holdings of euro area debt securities remain broadly stable from December 2014 to June 2015, but the outstanding value of debt issued in the United  States grew by more than 11 per cent over the same period.

The net asset value of money market funds (MMFs) resident in Ireland grew by over 4 per cent from December 2014 to June 2015, rising to €402,295 million from €387,089 million in June 2014. This was driven in recent months by euro depreciation as around 87 per cent of total MMFs holdings are denominated in Sterling and US dollar.

Total assets held by MMFs in June was €405,415 million. The low yield debt environment saw holdings of euro area debt securities (annualised yield of 0.24 percent) remain broadly stable with noticeable movements into short term Australian and Canadian debt (annualised yield of 0.46 and 0.37 percent respectively). This was driven by sterling denominated funds investing into holdings of Australian debt and by both sterling and dollar denominated funds investing into Canadian debt over the 6 months from December to June 2015 (Table 1) in search for the slightly higher yields available. Euro denominated funds exposure to United States debt also increased from €3,612 million to €4,382 million or 21 per cent over the 6 months to June 2015.

MMFs also sought out to enhance returns by expanding their holdings into securities with longer   residual maturities. Securities with residual maturities greater than 3 months increased by 17 percent over the period from December 2014 to June 2015. (Table 2)

Holdings of government debt amounted to €51,533 million in June 2015 with the United States, German and French debt accounting for 85 percent of holdings. This highlights the requirement by MMFs to hold highly rated debt (Chart 1).

Equity liabilities stood at €402,294 million in June 2015 (Chart 2). Equity liabilities issued to United Kingdom holders in sterling made up the largest contribution at 44 per cent (€180,941 million). Net transactions outflows amounted to €15,238 million over the 6 months from December 2014 to June 2015, but these were offset by positive revaluations (including foreign exchange effects) of €30,442 million over the same period.