Bermuda had foreign portfolio holdings of more than half-a-trillion dollars last year, predominantly through its financial services sector.

At $505.6 billion, that was down 2 per cent on 2014. The decrease was attributed to a decline in the assets of the insurance sector and net assets values of investments funds.

Globally cross-border holdings fell 5.6 per cent last year.

The insurance sub sector accounts for 84 per cent of the island’s total foreign portfolio holdings, followed by investment funds, banking and the Bermuda Government.

While the island does not feature in the world’s top ten places with the largest foreign portfolio holdings, it does account for a chunk of the $46.2 trillion of global cross-border holdings of securities.

The insight comes from data released for the first time by the Bermuda Monetary Authority. Since 2001, Bermuda has been participating in a voluntary global investment survey, under the auspices of the International Monetary Fund.

The Co-ordinated Portfolio Investment Survey tracks the cross-border holdings of portfolio investment securities in 82 countries. The information shows where Bermuda’s financial services entities invest assets, and which countries are investing in Bermuda.

As a group, the island’s insurers and reinsurers, investment funds and banks heavily favour the US for their portfolio holdings, with $293.7 billion invested in the country, up 10 per cent, and representing 58 per cent of the overall total.

The next most popular destinations for portfolio investments were Britain and Canada, accounting for 7 per cent and 4 per cent, respectively. Cayman Islands, Luxembourg and France account for 3 per cent each, with the remaining 22 per cent spread elsewhere around the world.

Bermuda’s derived liabilities, which are the value of securities held by non-residents, were $479 billion at the end of 2015, a decrease of 1 per cent. Derived equity securities accounted for 89 per cent of the total, while debt securities, both long and short, made up the remainder.

The island’s foreign portfolio holdings consist mainly of debt securities, which last year totalled $398 billion.

At present, Bermuda collects foreign portfolio holdings data from the government and financial services industry only.

The BMA report noted that the financial services industry “is the biggest sector in Bermuda and contributes over 60 per cent of Bermuda’s economic output”.

The insurance sector heavily dominates the island’s foreign portfolio holdings and has done since the first investment survey was conducted in Bermuda in 2001.

The sector’s foreign portfolio holdings had a $425 billion value at the end of last year. Investment funds were the next biggest in terms of foreign portfolio holdings with $68 billion, followed by banks with $9.4 billion and the government with $2.1 billion.

Debt securities, the vast majority being long-term, account for 88 per cent of the insurance sector’s foreign portfolio holdings, with the remainder in equities.

Investment fund foreign portfolio holdings in Bermuda have fallen from a peak of $209.8 billion in 2007 to $68 billion last year, which was $12 billion lower than in 2014. The net asset value of the funds was $144 billion.

Unlike the insurance sub sector, the foreign portfolio holdings of investment funds contain a bigger percentage of equities, at 80 per cent, with debt securities accounting for 20 per cent.

The banking sub sector’s foreign portfolio holdings were almost exclusively debt securities, with equities representing 1 per cent.

Government’s foreign portfolio holdings were divided between equities, at 84 per cent, and long-term debt securities, with a very small portion of short-term debt securities. Geographically, portfolio investment securities issued by the US account for $1.9 billion, or 89 per cent, of government’s holdings.

Bermuda’s derived liabilities, that is securities held by non-residents, were down 1 per cent on the previous year, at $479 billion. These liabilities consist mainly of equity securities accounting for the remaining 11 per cent.

Regarding the Bermuda survey, the BMA stated: “The primary purpose of this study is to provide countries with systematic estimates of their foreign portfolio assets, at market value, and to enhance the quality of statistics on global capital flow.”

It added: “Overall, the CPIS exercise provides countries with systematic estimates of their foreign portfolio assets by security type and geographical allocation, and enhances the quality of statistics on global capital flow.

“Bermuda’s participation contributes to an improved understanding of the jurisdiction as an international financial centre and re-emphasises Bermuda’s commitment to a high standard of transparency.”