Holdings in the United States led Bermuda's foreign portfolio investment assets at the end of 2022, a new report from the Bermuda Monetary Authority reveals.

The Bermuda Co-ordinated Portfolio Investment Survey – 2022 Report shows that the US accounted for 53.5 per cent, or $582.5 billion, of the total holdings of Bermuda's foreign portfolio investment assets, when compared with 61.4 per cent, or $586.8 billion, in 2021.

The Cayman Islands followed, with a 6.8 per cent share, then Canada and Britain with 4.7 per cent and 4.2 per cent, respectively.

Ireland, Hong Kong, and Luxembourg have shares of 4.0 per cent, 2.8 per cent, and 2.4 per cent, respectively, the BMA said.

The value of portfolio holdings issued in the latter six countries grew 34 per cent on average compared with the previous year.

In addition to the geographical breakdown, Bermuda's holders of foreign securities were divided into four sub sectors: insurance, investment funds, banking and the Bermuda Government.

Pension funds are included as part of insurance. However, their contribution is less than 1 per cent of the total insurance foreign portfolio holdings, the BMA said.

The BMA said the insurance sub sector had always dominated Bermuda's foreign portfolio holdings. At year-end 2022, the sub sector portfolio holdings reached the value of $833.8 billion, a 9.8 per cent increase, or $74.6 billion, compared with 2021, representing 76.6 per cent of portfolio holdings.

Insurance has been the largest sub sector since 2001, when the survey was first conducted in Bermuda.

The BMA said this was consistent with the size and relevance of the insurance industry in Bermuda, which is predominantly an insurance-based IFC.

For the ten-year period from 2012 to 2022, insurance foreign portfolio holdings grew 151.3 per cent, or $502 billion.

Investment funds were the second-largest sub sector.

At year-end 2022, investment fund foreign portfolio holdings were $245.8 billion, an increase of 32.1 per cent, or $59.7 billion, compared with 2021, accounting for 22.6 per cent of total holdings.

From 2012 to 2022, investment fund foreign portfolio holdings grew 153 per cent, or $148.6 billion.

The banking sub sector accounted for 0.6 per cent, or $6.5 billion, of total foreign portfolio holdings as of the end of December 2022, a decrease of 9.1 per cent, or $0.645 billion, compared with the previous year.

The BMA said this was the lowest reported value of banks' foreign portfolio holdings for the ten-year period from 2012 to 2022.

The Bermuda Government's foreign portfolio holdings were $2.59 billion as of year-end 2022, a decrease of 13 per cent, or $0.39 billion, representing 0.2 per cent of Bermuda’s total foreign portfolio holdings.

Bermuda decreased the value of its derived liabilities by 14.5 per cent, to $503.4 billion reported as of December 31 2022.

Bermuda’s derived liabilities consisted mainly of equity securities, which represented 81.7 per cent of total derived liabilities.

The island’s derived liabilities were held predominantly by residents of the US and Hong Kong, who together had a 65.5 per cent share, with the US at 48.1 per cent and Hong Kong at 17.4 per cent at year-end 2022.

Global holdings accounted for $69.7 trillion.

Aggregated global cross-border holdings of securities from all economies had shown year-on-year growth for every year over the past 20 years, except for two periods, the BMA said.

From December 31 2021 to December 31 2022, global holdings experienced a decrease of 15.2 per cent, or $11.7 trillion, similar to that seen in the global financial crisis from 2007 to 2008 (21.0 per cent or $8.3 trillion).

With regards to other international financial centres, the Cayman Islands and Singapore had remained with a similar value of holdings over the past year, while Ireland, Hong Kong, Luxembourg and Switzerland hade averaged a decrease of minus 15.7 per cent, the BMA said.

The BMA said the CPIS was a voluntary data collection exercise conducted annually under the auspices of the International Monetary Fund.

The CPIS collects information about the cross-border holdings of portfolio investment securities in different economies. Portfolio investment is defined as cross-border transactions and positions involving debt or equity securities other than those included in direct investment or reserve assets.

Bermuda has participated in this exercise since 2001 and the island's numbers include data from the domestic and international financial sectors.

The BMA said the primary purpose of this study was to provide countries with estimates of their foreign portfolio assets at market value and to enhance the quality of statistics on global capital flow.

The island’s financial services regulator said Bermuda’s CPIS statistics were based only on data collected from the Bermuda Government and the financial services industry. The data does not include foreign portfolio holdings from other sectors (ie non-financial corporations and households).