## Global Portfolio Asset Holdings Decrease Amid Elevated Uncertainty

_IMF Blog, March 20, 2023_

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**Canonical URL:** [Global Portfolio Asset Holdings Decrease Amid Elevated Uncertainty](https://www.imf.org/en/blogs/articles/2023/03/20/global-portfolio-asset-holdings-decrease-amid-elevated-uncertainty)

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## Bibliographic details
- Authors: Evrim Bese Goksu, Alicia Hierro, Rita Mesias, Wilson Phiri
- Published: March 20, 2023

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### Key findings
- Global portfolio investment asset holdings decreased by 15 percent in the first half of last year, the most since 2008.
- The decrease is attributed to both the reduction in investments and valuation effects.
- The top 10 portfolio investment holding countries, collectively accounting for about two-thirds of global positions tracked by the CPIS, experienced a sharp decline since the last reporting period six months earlier.
- The Cayman Islands’ portfolio investment holdings increased by 6.2 percent due to investments in the United States and Japan.

### Drivers of the decline
- Elevated risk aversion amid increasing energy prices weighed on capital markets and portfolio investments.
- Heightened geopolitical risks contributed to reduced cross-border portfolio activity.
- Rising inflation risks and tightening monetary policies in advanced economies further depressed sentiment and holdings.

### Country- and flow-specific observations
- The drop was largely driven by declines in investments by:
  - the United States (notably in Germany and the Netherlands),
  - Luxembourg (notably in the United States, Ireland, and Japan),
  - Ireland (notably in the United States and United Kingdom),
  - Japan (mainly in the United States).
- By contrast, the Cayman Islands recorded a 6.2 percent increase in portfolio investment holdings driven by investments in the United States and Japan.

### About the Coordinated Portfolio Investment Survey (CPIS)
- The IMF’s CPIS collects data on portfolio investment assets from more than 80 countries.
- It is the only global bi-annual survey of cross-border portfolio holdings by counterpart economy and by sector of holders and nonresident issuers.
- The CPIS shows:
  - which countries invest in a particular country,
  - how the investments are distributed across institutional sectors,
  - the currency distribution of such assets.
- Complete results are available at http://data.imf.org/CPIS.

### Risks and macroeconomic implications
- Portfolio investments tend to be volatile and, if not well monitored and managed, can trigger macroeconomic challenges such as:
  - overheating of the host economy,
  - loss of export competitiveness due to exchange rate appreciation,
  - higher vulnerability in the event of a crisis.

*Evrim Bese Goksu, Alicia Hierro, Rita Mesias, Wilson Phiri — March 20, 2023*

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## References

- [foreign direct investment](https://www.imf.org/en/Blogs/Articles/2022/12/07/united-states-is-worlds-top-destination-for-foreign-direct-investment)
- [Coordinated Portfolio Investment Survey](http://data.imf.org/CPIS)

_Source: https://www.imf.org/en/blogs/articles/2023/03/20/global-portfolio-asset-holdings-decrease-amid-elevated-uncertainty_