U.S. International Investment Position

First Quarter 2020, Year 2019, and Annual Update

By Elena Nguyen and Erin Whitaker  |  Volume 100, Number 7  |  July 21, 2020

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This article presents the U.S. international investment position (IIP) statistics for the first quarter of 2020 and the annual update of the IIP accounts, which introduces new annual statistical detail for 2019, including changes in position resulting from financial transactions and other changes in position such as price changes, exchange-rate changes, and changes in volume and valuation n.i.e. (not included elsewhere). With this year's annual update, the Bureau of Economic Analysis (BEA) has incorporated newly available and revised source data for 2016–2019 and additional years for selected series. Beginning with statistics for 1976, BEA has reclassified certain U.S. government capital subscriptions or other contributions to international organizations from loan assets to other equity assets, a new category within other investment assets. Also, BEA updated other equity and loan assets to incorporate U.S. government transactions and positions that were not previously included.

The U.S. net international investment position—the difference between U.S. residents' foreign financial assets and liabilities—was −$12.06 trillion at the end of the first quarter of 2020 (chart 1). Assets totaled $26.77 trillion and liabilities were $38.82 trillion. At the end of the fourth quarter of 2019, the net investment position was −$11.05 trillion.

The U.S. international investment position is a statistical balance sheet that presents the dollar value of U.S. external financial assets and liabilities at a specific point in time. A negative net investment position represents a U.S. net liability to the rest of the world.

The –$1.01 trillion change in the net investment position from the fourth quarter of 2019 to the first quarter of 2020 came from net financial transactions of −$184.2 billion and net other changes in position, such as price and exchange-rate changes, of −$822.8 billion (table A).

The U.S. net international investment position was −$11.05 trillion at the end of 2019 compared to −$9.67 trillion at the end of 2018 (chart 1). The −$1.38 trillion change in the net investment position from the end of 2018 to the end of 2019 came from net financial transactions of −$395.5 billion and net other changes in position, such as price and exchange-rate changes, of −$980.5 billion (table C).

Chart 1. U.S. Net International Investment Position, line chart

[Click chart to expand]

 

 

Table A. Quarterly Change in the U.S. Net International Investment Position
[Billions of dollars, not seasonally adjusted]
Type of investment Position, 2019 Q4 Change in position in 2020 Q1 Position, 2020 Q1
Total Attributable to:
Financial transactions Other changes in position.1
U.S. net international investment position −11,050.5 −1,007.0 −184.2 −822.8 −12,057.5
Net position excluding financial derivatives −11,070.7 −1,022.1 −162.4 −859.8 −12,092.8
Financial derivatives other than reserves, net2 20.2 15.2 −21.8 37.0 35.3
U.S. assets 29,152.8 −2,385.7 (2) (2) 26,767.1
Assets excluding financial derivatives 27,362.4 −3,595.8 739.9 −4,335.7 23,766.6
Financial derivatives other than reserves 1,790.4 1,210.1 (2) (2) 3,000.5
By functional category:          
Direct investment at market value 8,798.7 −1,816.6 −19.1 −1,797.5 6,982.0
Equity 7,485.0 −1,784.6 13.4 −1,798.0 5,700.5
Debt instruments 1,313.6 −32.1 −32.5 0.5 1,281.6
Portfolio investment 13,375.9 −2,388.5 144.7 −2,533.2 10,987.4
Equity and investment fund shares 9,459.1 −2,097.9 306.4 −2,404.3 7,361.2
Debt securities 3,916.8 −290.6 −161.7 −128.9 3,626.2
Short term 734.0 −64.5 −62.3 −2.2 669.5
Long term 3,182.8 −226.0 −99.4 −126.7 2,956.7
Financial derivatives other than reserves 1,790.4 1,210.1 (2) (2) 3,000.5
Over-the-counter contracts 1,755.3 1,157.4 (2) (2) 2,912.7
Single-currency interest rate contracts 1,297.5 833.3 (2) (2) 2,130.8
Foreign exchange contracts 288.1 194.9 (2) (2) 483.0
Other contracts 169.7 129.2 (2) (2) 298.9
Exchange-traded contracts 35.1 52.7 (2) (2) 87.8
Other investment 4,673.4 586.3 614.6 −28.3 5,259.7
Other equity 68.0 1.3 1.3 (*) 69.3
Currency and deposits 2,010.6 424.3 439.8 −15.4 2,435.0
Loans 2,541.4 165.5 178.1 −12.6 2,706.9
Insurance technical reserves n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 53.3 −4.8 −4.6 −0.2 48.5
Reserve assets 514.4 23.1 −0.2 23.3 537.5
Monetary gold 396.1 24.6 0.0 24.6 420.7
Special drawing rights 50.7 −0.6 (*) −0.7 50.1
Reserve position in the International Monetary Fund 26.2 −0.7 −0.3 −0.3 25.5
Other reserve assets 41.4 −0.3 (*) −0.3 41.1
U.S. liabilities 40,203.3 −1,378.7 (2) (2) 38,824.6
Liabilities excluding financial derivatives 38,433.0 −2,573.6 902.3 −3,475.9 35,859.4
Financial derivatives other than reserves 1,770.3 1,194.9 (2) (2) 2,965.2
By functional category:          
Direct investment at market value 10,547.1 −1,777.3 48.1 −1,825.4 8,769.8
Equity 8,764.2 −1,739.4 57.8 −1,797.3 7,024.7
Debt instruments 1,782.9 −37.8 −9.7 −28.1 1,745.1
Portfolio investment 21,389.8 −1,611.4 21.3 −1,632.7 19,778.4
Equity and investment fund shares 9,220.2 −1,572.0 271.0 −1,843.0 7,648.2
Debt securities 12,169.6 −39.4 −249.7 210.3 12,130.2
Short term 937.3 −11.2 −10.7 −0.5 926.1
Long term 11,232.3 −28.2 −239.0 210.8 11,204.1
Financial derivatives other than reserves 1,770.3 1,194.9 (2) (2) 2,965.2
Over-the-counter contracts 1,738.0 1,140.1 (2) (2) 2,878.1
Single-currency interest rate contracts 1,276.3 855.1 (2) (2) 2,131.3
Foreign exchange contracts 296.1 174.9 (2) (2) 471.0
Other contracts 165.7 110.1 (2) (2) 275.8
Exchange-traded contracts 32.2 54.8 (2) (2) 87.1
Other investment 6,496.2 815.1 832.9 −17.8 7,311.2
Other equity n.a. n.a. n.a. n.a. n.a.
Currency and deposits 3,458.8 500.1 506.1 −5.9 3,958.9
Loans 2,782.5 314.8 323.0 −8.2 3,097.3
Insurance technical reserves n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 206.1 0.7 3.8 −3.1 206.8
Special drawing rights allocations 48.8 −0.6 0.0 −0.6 48.2
n.a.
Not available
(*)
Value between zero and +/− $50 million
  1. Disaggregation of other changes in position into price changes, exchange-rate changes, and other changes in volume and valuation is only presented for annual statistics (see table C).
  2. Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

Note. The statistics on positions are presented in table 1.2 of the international investment position (IIP) accounts on BEA's website. The statistics on financial transactions are not seasonally adjusted and are presented in table 1.2 of the international transactions accounts (ITAs) on BEA's website.

U.S. assets decreased by $2.39 trillion to a total of $26.77 trillion at the end of the first quarter, mostly reflecting decreases in portfolio investment and direct investment assets that were partly offset by increases in financial derivatives and in other investment assets (chart 2). Portfolio investment assets decreased by $2.39 trillion, to $10.99 trillion, and direct investment assets decreased by $1.82 trillion, to $6.98 trillion, reflecting sharp decreases in foreign stock prices and the depreciation of major foreign currencies against the U.S. dollar that lowered the value of these assets in dollar terms. These large changes in asset prices reflected a sudden decrease in production and earnings as global economic activity was disrupted by the COVID-19 pandemic.

Other changes in position drove the overall decrease in U.S. assets (table A).

Chart 2. U.S. Assets, line chart

[Click chart to expand]

U.S. liabilities decreased by $1.38 trillion to a total of $38.82 trillion at the end of the first quarter, mostly reflecting decreases in direct investment and portfolio investment liabilities that were partly offset by increases in financial derivatives and in other investment liabilities (chart 3). Direct investment liabilities decreased by $1.78 trillion, to $8.77 trillion, and portfolio investment liabilities decreased by $1.61 trillion, to $19.78 trillion, mostly reflecting decreases in U.S. stock prices amid the COVID-19 pandemic.

Other changes in position drove the overall decrease in U.S. liabilities (table A).

Chart 3. U.S. Liabilities, line chart

[Click chart to expand]

Key changes to the IIP statistics and the results of the annual update are highlighted below.

  • BEA has reclassified certain U.S. government capital subscriptions or other contributions to international organizations from loan assets to other equity assets, a new category within other investment assets. The reclassification of other equity assets results in the addition of line items in the IIP and the International Transactions Accounts for transactions and positions in other equity assets and liabilities. Also, BEA updated other equity and loan assets to incorporate U.S. government transactions and positions that were not previously included. Quarterly statistics are revised for the first quarter of 2006 to the fourth quarter of 2019. Annual statistics are revised for 1976–2019.
    • For 1976–1999, the reclassification of other equity assets from loan assets results in offsetting revisions between these two investment categories, leaving the statistics for U.S. assets and for the net IIP unchanged.
    • For 2000–2015, the statistics for U.S. assets and for the net IIP are revised up by an average of $0.8 billion annually, reflecting the incorporation of U.S. government transactions and positions that were not previously included in other equity and loan assets.
  • Revised IIP statistics for 2016–2019 reflect newly available and revised source data that impact all major categories of assets and liabilities (table B).
    • Revised statistics for direct investment positions incorporate the results of newly available and revised source data from BEA quarterly and annual direct investment surveys.
    • Revised statistics for portfolio investment positions incorporate the results of the U.S. Department of the Treasury's annual surveys “U.S. Ownership of Foreign Securities, including Selected Money Market Instruments” as of December 2018 and “Foreign-Residents' Holdings of U.S. Securities, including Selected Money Market Instruments” as of June 2019.
    • Revised statistics for financial derivatives and other investment positions (other equity, currency and deposits, loans, insurance technical reserves, and trade credit and advances) reflect revised source data mainly from the U.S. Department of the Treasury's Treasury International Capital surveys.

For information about revisions to financial transactions that impacted the IIP, see “Annual Update of the U.S. International Transactions Accounts” in this issue of the Survey of Current Business.

Table B. Updates to the U.S. Net International Investment Position at
Yearend, 2016–2019
[Billions of dollars]
Type of investment 2016 2017 2018 2019
Previously published Revised Amount of revision Previously published Revised Amount of revision Previously published Revised Amount of revision Previously published Revised Amount of revision
U.S. net international investment position −8,192.2 −8,129.3 62.9 −7,743.2 −7,622.2 121.0 −9,554.7 −9,674.4 −119.7 −10,991.4 −11,050.5 −59.1
Net position excluding financial derivatives −8,250.3 −8,187.5 62.9 −7,780.9 −7,659.9 121.0 −9,592.4 −9,716.5 −124.1 −11,011.5 −11,070.7 −59.1
Financial derivatives other than reserves, net 58.2 58.2 0.0 37.6 37.6 0.0 37.7 42.0 4.4 20.2 20.2 0.0
U.S. assets 24,059.7 24,031.5 −28.2 27,772.9 27,772.3 −0.5 25,241.5 25,233.8 −7.7 29,317.5 29,152.8 −164.7
Direct investment at market value 7,421.9 7,403.2 −18.7 8,910.0 8,923.1 13.1 7,503.9 7,443.9 −60.0 8,837.7 8,798.7 −39.0
Portfolio investment 10,011.4 10,011.4 0.0 12,571.5 12,571.5 0.0 11,491.4 11,433.6 −57.8 13,510.3 13,375.9 −134.4
Financial derivatives other than reserves 2,220.5 2,220.5 0.0 1,560.8 1,560.8 0.0 1,492.3 1,449.6 −42.7 1,790.4 1,790.4 0.0
Other investment 3,998.7 3,990.7 −8.1 4,280.9 4,267.3 −13.6 4,304.8 4,457.6 152.8 4,664.7 4,673.4 8.7
Reserve assets 407.2 405.8 −1.4 449.7 449.7 0.0 449.1 449.1 0.0 514.4 514.4 0.0
U.S. liabilities 32,251.8 32,160.8 −91.1 35,516.1 35,394.5 −121.6 34,796.2 34,908.2 112.0 40,308.8 40,203.3 −105.6
Direct investment at market value 7,596.1 7,510.5 −85.6 8,925.5 8,814.8 −110.6 8,483.3 8,401.7 −81.6 10,581.8 10,547.1 −34.7
Portfolio investment 17,360.0 17,360.0 0.0 19,398.3 19,398.3 0.0 18,715.8 18,844.2 128.3 21,480.3 21,389.8 −90.5
Financial derivatives other than reserves 2,162.3 2,162.3 0.0 1,523.2 1,523.2 0.0 1,454.6 1,407.5 −47.0 1,770.3 1,770.3 0.0
Other investment 5,133.5 5,128.0 −5.4 5,669.2 5,658.3 −10.9 6,142.4 6,254.8 112.4 6,476.4 6,496.2 19.7

The U.S. net international investment position was −$11.05 trillion at the end of 2019 compared to −$9.67 trillion at the end of 2018 (table C).

U.S. assets increased by $3.92 trillion, to a total of $29.15 trillion, at the end of 2019, reflecting increases in all major categories of assets, particularly in portfolio investment and direct investment assets. Portfolio investment assets increased by $1.94 trillion, to $13.38 trillion, and direct investment assets increased by $1.35 trillion, to $8.80 trillion, driven mainly by foreign stock price increases.

Both financial transactions and other changes in position contributed to the overall increase in U.S. assets (table C).

U.S. liabilities increased by $5.30 trillion, to a total of $40.20 trillion, at the end of 2019, reflecting increases in all major categories of liabilities, particularly in portfolio investment and direct investment liabilities. Portfolio investment liabilities increased by $2.55 trillion, to $21.39 trillion, and direct investment liabilities increased by $2.15 trillion, to $10.55 trillion, driven mainly by U.S. stock price increases.

Both financial transactions and other changes in position contributed to the overall increase in U.S. liabilities (table C).

Table C. Annual Change in the U.S. Net International Investment Position
[Billions of dollars]
Type of investment Yearend position, 2018 Change in position in 2019 Yearend position, 2019
Total Attributable to:
Financial transactions Other changes in position
Total Price changes Exchange-rate changes1 Changes in volume and valuation n.i.e.2
U.S. net international investment position −9,674.4 −1,376.1 −395.5 −980.5 (4) (4) (4) −11,050.5
Net position excluding financial derivatives −9,716.5 −1,354.2 −357.2 −997.0 −1,104.9 119.5 −11.5 −11,070.7
Financial derivatives other than reserves, net3 42.0 −21.9 −38.3 16.4 (4) (4) (4) 20.2
U.S. assets 25,233.8 3,919.0 (3) (3) (3) (3) (3) 29,152.8
Assets excluding financial derivatives 23,784.2 3,578.2 440.8 3,137.4 3,080.1 128.3 −71.0 27,362.4
Financial derivatives other than reserves 1,449.6 340.8 (3) (3) (3) (3) (3) 1,790.4
By functional category:                
Direct investment at market value 7,443.9 1,354.7 188.5 1,166.3 1,104.5 40.5 21.3 8,798.7
Equity 6,149.4 1,335.6 173.5 1,162.1 1,104.5 40.5 17.1 7,485.0
Debt instruments 1,294.5 19.1 14.9 4.2 ….. ….. 4.2 1,313.6
Portfolio investment 11,433.6 1,942.3 46.6 1,895.7 1,914.0 86.6 −104.9 13,375.9
Equity and investment fund shares 7,899.6 1,559.5 −191.3 1,750.8 1,682.8 77.5 −9.4 9,459.1
Debt securities 3,534.0 382.8 237.9 144.9 231.2 9.2 −95.5 3,916.8
Short term 651.6 82.4 167.6 −85.2 ….. 14.8 −100.0 734.0
Long term 2,882.4 300.3 70.3 230.0 231.2 −5.7 4.5 3,182.8
Financial derivatives other than reserves 1,449.6 340.8 (3) (3) (3) (3) (3) 1,790.4
Over-the-counter contracts 1,408.9 346.4 (3) (3) (3) (3) (3) 1,755.3
Single-currency interest rate contracts 928.8 368.7 (3) (3) (3) (3) (3) 1,297.5
Foreign exchange contracts 303.6 −15.5 (3) (3) (3) (3) (3) 288.1
Other contracts 176.4 −6.8 (3) (3) (3) (3) (3) 169.7
Exchange-traded contracts 40.7 −5.6 (3) (3) (3) (3) (3) 35.1
Other investment 4,457.6 215.8 201.1 14.8 0.0 2.1 12.7 4,673.4
Other equity 66.7 1.4 1.4 0.0 0.0 ….. 0.0 68.0
Currency and deposits 1,854.1 156.5 132.6 23.9 ….. (*) 23.9 2,010.6
Loans 2,484.4 56.9 66.1 −9.2 ….. 2.0 −11.2 2,541.4
Insurance technical reserves n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 52.4 1.0 1.0 (*) ….. (*) 0.0 53.3
Reserve assets 449.1 65.3 4.7 60.7 61.6 −1.0 0.0 514.4
Monetary gold 334.5 61.6 0.0 61.6 61.6 ….. 0.0 396.1
Special drawing rights 50.8 −0.1 0.2 −0.3 ….. −0.3 0.0 50.7
Reserve position in the International Monetary Fund 22.0 4.1 4.3 −0.1 ….. −0.1 0.0 26.2
Other reserve assets 41.8 −0.4 0.2 −0.5 0.0 −0.5 0.0 41.4
U.S. liabilities 34,908.2 5,295.1 (3) (3) (3) (3) (3) 40,203.3
Liabilities excluding financial derivatives 33,500.7 4,932.4 798.0 4,134.4 4,185.0 8.8 −59.4 38,433.0
Financial derivatives other than reserves 1,407.5 362.7 (3) (3) (3) (3) (3) 1,770.3
By functional category:                
Direct investment at market value 8,401.7 2,145.4 351.6 1,793.8 1,743.2 ….. 50.5 10,547.1
Equity 6,725.5 2,038.7 290.3 1,748.4 1,743.2 ….. 5.2 8,764.2
Debt instruments 1,676.2 106.7 61.3 45.4 ….. ….. 45.4 1,782.9
Portfolio investment 18,844.2 2,545.6 180.0 2,365.6 2,441.8 9.1 −85.3 21,389.8
Equity and investment fund shares 7,539.2 1,681.0 −244.1 1,925.1 1,944.3 ….. −19.3 9,220.2
Debt securities 11,304.9 864.6 424.0 440.6 497.5 9.1 −66.0 12,169.6
Short term 982.2 −44.9 −43.2 −1.8 ….. −1.8 0.0 937.3
Long term 10,322.7 909.5 467.2 442.3 497.5 10.9 −66.0 11,232.3
Financial derivatives other than reserves 1,407.5 362.7 (3) (3) (3) (3) (3) 1,770.3
Over-the-counter contracts 1,366.2 371.8 (3) (3) (3) (3) (3) 1,738.0
Single-currency interest rate contracts 893.7 382.6 (3) (3) (3) (3) (3) 1,276.3
Foreign exchange contracts 299.0 −2.9 (3) (3) (3) (3) (3) 296.1
Other contracts 173.6 −8.0 (3) (3) (3) (3) (3) 165.7
Exchange-traded contracts 41.3 −9.1 (3) (3) (3) (3) (3) 32.2
Other investment 6,254.8 241.3 266.4 −25.0 ….. −0.3 −24.7 6,496.2
Other equity n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Currency and deposits 3,257.2 201.6 204.1 −2.5 ….. −0.7 −1.8 3,458.8
Loans 2,749.7 32.7 52.4 −19.7 ….. 0.6 −20.3 2,782.5
Insurance technical reserves n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 198.8 7.3 9.8 −2.6 ….. (*) −2.6 206.1
Special drawing rights allocations 49.1 −0.3 0.0 −0.3 ….. −0.3 0.0 48.8
n.a.
Not available
.....
Not applicable
(*)
Value between zero and +/− $50 million
  1. Represents gains or losses on foreign-currency-denominated assets and liabilities due to their revaluation at current exchange rates.
  2. Changes in volume and valuation n.i.e. (not included elsewhere) includes changes due to year-to-year shifts in the composition of reporting panels and to the incorporation of more comprehensive survey results. Also includes capital gains and losses of direct investment affiliates and changes in positions that cannot be allocated to financial transactions, price changes, or exchange-rate changes.
  3. Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.
  4. Data are not separately available for price changes, exchange-rate changes, and changes in volume and valuation n.i.e.

Note. The statistics are presented in table 1.3 of the IIP accounts on BEA's website.