Dutch investment funds hit by financial turbulence

by Richard Kilner

Story link: Dutch investment funds hit by financial turbulence

De Nederlandsche Bank has released figures showing that global financial turbulence is also affecting investment funds.

The net worth of Dutch investment funds fell by 6% (5.1bn euros) in Q2 of 2008.

It is the fourth consecutive quarter that has seen a fall in worth, which began during the birth of the subprime mortgage crisis and ensuing credit crunch last summer.

The decline in value is due to an increase in withdrawals, and also losses incurred on portfolio investments.

Total net worth has slumped by over a fifth in the last four quarters, and now stands at around 78.5bn euros.

The second quarter of 2008 also saw Dutch firms write down their investments, with bond portfolios most affected with a 2.6% drop in value.

Although real estate saw a more modest decline of 0.4%, it is the first such occurrence since 2003, and during the intervening period real estate had seen substantial writeups.

Despite the subprime mortgage crisis and credit crunch beginning a year ago, it seems that the effects continue to be felt with higher borrowing costs and declining investment funds.