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Households' investments in foreign mutual funds made transparent

Massimo Coletta () and Raffaele Santioni ()
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Massimo Coletta: Bank of Italy

No 533, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: The share of foreign investment funds in the portfolio of Italian households, negligible up to the mid-1990s, has risen significantly since 2012. At the end of 2018, these funds represented 16 per cent of households’ financial portfolios and 54 per cent of their total investment fund holdings. Through foreign investment funds, households invest in the global financial markets, thereby increasing the degree of geographical diversification of their investments and, in principle, improving the risk-profile of their portfolios. By using a combination of very granular databases, this paper provides for the first time a comprehensive description of the foreign funds held by Italian households, with a particular focus on the period 2008-2017. The main contribution is the discovery of the final destination of the savings invested by Italian households via foreign mutual funds, broken down by country, sector and type of instrument. Moreover, the high data granularity has enabled us to estimate the total expense ratio and the net return, broken down into the main fund categories.

Keywords: asset allocation; look-through; mutual funds; portfolio investment (search for similar items in EconPapers)
JEL-codes: G11 G23 G50 (search for similar items in EconPapers)
Date: 2019-11
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