European funds, American portfolios

The channel to the United States is measurable. Its owner is harder to identify. In the first quarter of 2026, investment funds domiciled in Ireland made €135 billion of net purchases in equities and debt securities. US securities absorbed €66 billion, almost half. But that €66 billion is not automatically European savings. It identifies the country of the issuer bought by an Irish fund, not the residence of the investor holding the fund’s shares. A second statistic is needed. ECB data show that euro area residents are indeed heavily exposed to the United States and that funds are their main route into US equities.

This is the second instalment in the “€12 trillion in transit” series. The first separated the fund’s domicile, manager, investor, currency and final issuer. This one follows the portfolios.

Dublin was a net buyer of US securities

The Central Bank of Ireland counts funds resident and authorised in Ireland, excluding money market funds in this part of its release. At the end of March 2026, their assets under management reached €5.595 trillion. Equities represented 55%, debt securities 29%, and cash, deposits, loans and other assets the remaining 16%.

During the quarter, net transactions reached €88 billion in equities and €48 billion in debt securities. Those two rounded figures add to €136 billion, while the Central Bank reports an unallocated total of €135 billion. Within that total, net purchases of US securities reached €66 billion, or 48.9%. This is a quarterly flow, not the US share of the whole portfolio.

The change in the stock cannot be equated with purchases either. Equity holdings rose from about €3.0 trillion to €3.1 trillion. They received €88 billion of positive transactions but suffered €33 billion of negative revaluations. Debt securities combined €48 billion in purchases with a €5 billion positive revaluation. A valuation effect is a change caused by prices or exchange rates rather than a purchase or sale.

Fund investors reside elsewhere

The liability side of a fund identifies who holds its shares. A more detailed Central Bank release for the third quarter of 2024 found that the United Kingdom held 41% of the shares in Irish funds excluding money market funds, ahead of the Netherlands at 12%, Luxembourg at 10% and Ireland at 9%. These countries identify the immediate holders on record, not necessarily the ultimate owners behind an intermediary or omnibus account. The snapshot also predates the flow under review by eighteen months.

It nevertheless sets the boundary: “Irish fund” does not mean “Irish savings”, or even “European Union savings”. The leading disclosed holder country was outside the EU. Assigning the €66 billion solely to European savers would therefore be an unsupported extrapolation.

European capital appears in a different population

To isolate European capital, the starting point must be euro area resident investors, followed by their foreign assets. The ECB’s November 2025 Financial Stability Review does exactly that. In the second quarter of 2025, those residents held more than €12 trillion in foreign portfolio assets, about half of them issued in the United States: €3.8 trillion in equities, €0.8 trillion in sovereign debt and €1.5 trillion in other debt securities. The three rounded items add to €6.1 trillion.

Investment funds accounted for 75% of the US equities held by euro area residents, almost 50% of their US sovereign debt and about 60% of their other US debt. Here, the statistical holder is a euro area resident. The ECB nevertheless notes that its dataset does not comprehensively cover foreign securities held outside the euro area and that the amounts are reported at market value.

Allocation shifted, but prices built most of the stock

The recent change is not solely the result of Wall Street’s rise. In an analysis published on the ECB Blog on 15 May 2026, five economists calculate that transactions by euro area non-bank financial institutions increased the portfolio share of US corporate equities by 2.7 percentage points between the fourth quarter of 2023 and the fourth quarter of 2025. Over the same period, the share of euro area corporate equities fell by 1.5 points. The authors estimate that a one-point increase in the US equity share is associated with a 0.3-point decline in the euro area equity share. This is an econometric association, not proof that every euro withdrawn in Europe directly finances one euro in the United States. The post also says that its views do not necessarily represent those of the ECB or the Eurosystem.

Over ten years, however, the market effect dominates. A May 2026 Financial Stability Review analysis estimates that euro area investors’ US equity holdings quadrupled between 2015 and 2025. About 70% of the increase came from valuation effects, mainly prices, and 30% from net transactions. Exposure grew for two separate reasons: investors bought, then the relative performance of US equities magnified their weight.

A savings union must track destination, not address

The European Commission presents the Savings and Investments Union as a way to connect savings with productive investment and finance the EU’s strategic objectives. Market integration can cut costs, improve diversification and offer better vehicles to savers. By itself, it cannot guarantee that additional capital will buy European securities.

The available evidence therefore supports a two-part answer. Euro area residents do finance US markets on a large scale, and funds are the main vehicle for their US equity exposure. The recent allocation of euro area NBFIs has also shifted towards US equities at the relative expense of euro area equities. But Ireland’s €66 billion flow combines capital from several origins and cannot be used as a meter of European savings leaving the continent.

The right policy indicator is not the volume domiciled in Dublin or Luxembourg. It would cross, for every period, the residence of the fund investor, the residence of the issuer and net transactions, while separating price and currency effects. Without that matrix, Europe can improve its financial plumbing without knowing precisely which economy receives the capital flowing through it.

The third instalment now follows the reverse path: how a fall in US assets can travel back into European funds, investors and markets through redemptions, margin and bank balance sheets.

Primary sources: Central Bank of Ireland, Q1 2026 investment fund statistics and Q3 2024 holder distribution; ECB, US holdings of euro area residents, November 2025; ECB Blog, NBFI portfolio reallocation, 15 May 2026; ECB, drivers of flows into US equities, May 2026; European Commission, Savings and Investments Union, updated 17 July 2026. Additions and ratios explicitly identified as such are l0g calculations based on rounded official figures. This is not investment advice.