U.S. International Investment Position

Third Quarter 2020

By Erin Whitaker  |  Volume 101, Number 1  |  January 22, 2021

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The U.S. net international investment position—the difference between U.S. residents’ foreign financial assets and liabilities—was −$13.95 trillion at the end of the third quarter of 2020 (chart 1). Assets totaled $29.41 trillion and liabilities were $43.36 trillion. At the end of the second quarter, the net investment position was −$13.08 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 −$865.6 billion change in the net investment position from the second quarter to the third quarter came from net financial transactions of −$219.9 billion and net other changes in position, such as price and exchange-rate changes, of −$645.7 billion (table A).

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, 2020 Q2 Change in position in 2020 Q3 Position, 2020 Q3
Total Attributable to:
Financial transactions Other changes in position1
U.S. net international investment position −13,084.6 −865.6 −219.9 −645.7 −13,950.2
Net position excluding financial derivatives −13,106.8 −870.3 −243.9 −626.4 −13,977.1
Financial derivatives other than reserves, net2 22.2 4.7 24.0 −19.3 26.9
U.S. assets 28,779.1 629.2 (2) (2) 29,408.3
Assets excluding financial derivatives 26,028.3 834.8 −69.8 904.6 26,863.1
Financial derivatives other than reserves 2,750.8 −205.6 (2) (2) 2,545.2
By functional category:          
Direct investment at market value 7,945.0 370.8 74.3 296.5 8,315.8
Equity 6,685.1 348.7 60.5 288.2 7,033.8
Debt instruments 1,259.9 22.2 13.8 8.3 1,282.1
Portfolio investment 12,388.4 684.7 142.2 542.5 13,073.1
Equity and investment fund shares 8,552.7 572.1 92.7 479.4 9,124.8
Debt securities 3,835.7 112.6 49.5 63.1 3,948.3
Short term 656.1 23.0 20.3 2.7 679.1
Long term 3,179.6 89.6 29.2 60.4 3,269.2
Financial derivatives other than reserves 2,750.8 −205.6 (2) (2) 2,545.2
Over-the-counter contracts 2,699.9 −206.3 (2) (2) 2,493.6
Single-currency interest rate contracts 2,195.1 −199.3 (2) (2) 1,995.8
Foreign exchange contracts 315.6 −20.9 (2) (2) 294.7
Other contracts 189.1 13.9 (2) (2) 203.1
Exchange-traded contracts 50.9 0.7 (2) (2) 51.6
Other investment 5,109.8 −256.8 −288.1 31.3 4,853.0
Other equity 69.3 0.2 0.2 0.0 69.6
Currency and deposits 2,282.9 −183.8 −203.6 19.8 2,099.0
Loans 2,709.0 −73.2 −84.5 11.2 2,635.8
Insurance technical reserves n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 48.6 0.0 −0.2 0.2 48.6
Reserve assets 585.1 36.1 1.8 34.3 621.2
Monetary gold 462.4 31.1 0.0 31.1 493.4
Special drawing rights 50.6 1.2 (*) 1.2 51.7
Reserve position in the International Monetary Fund 30.6 2.5 1.8 0.7 33.1
Other reserve assets 41.5 1.4 (*) 1.4 42.9
U.S. liabilities 41,863.7 1,494.8 (2) (2) 43,358.5
Liabilities excluding financial derivatives 39,135.1 1,705.1 174.1 1,531.0 40,840.3
Financial derivatives other than reserves 2,728.6 −210.3 (2) (2) 2,518.2
By functional category:          
Direct investment at market value 10,090.1 762.3 72.6 689.7 10,852.4
Equity 8,401.3 730.9 39.8 691.0 9,132.2
Debt instruments 1,688.8 31.4 32.8 −1.4 1,720.2
Portfolio investment 22,046.8 967.8 147.5 820.3 23,014.6
Equity and investment fund shares 9,212.1 923.2 146.4 776.8 10,135.3
Debt securities 12,834.8 44.6 1.1 43.5 12,879.4
Short term 1,280.0 −47.0 −47.5 0.5 1,233.0
Long term 11,554.7 91.6 48.6 43.0 11,646.4
Financial derivatives other than reserves 2,728.6 −210.3 (2) (2) 2,518.2
Over-the-counter contracts 2,678.6 −207.1 (2) (2) 2,471.6
Single-currency interest rate contracts 2,171.6 −195.1 (2) (2) 1,976.5
Foreign exchange contracts 318.1 −27.8 (2) (2) 290.3
Other contracts 188.9 15.8 (2) (2) 204.7
Exchange-traded contracts 49.9 −3.3 (2) (2) 46.6
Other investment 6,998.2 −25.0 −46.0 21.0 6,973.2
Other equity n.a. n.a. n.a. n.a. n.a.
Currency and deposits 3,728.6 0.7 −4.1 4.8 3,729.3
Loans 3,011.0 −29.4 −44.4 14.9 2,981.5
Insurance technical reserves n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 210.1 2.6 2.4 0.2 212.7
Special drawing rights allocations 48.6 1.1 0.0 1.1 49.7
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 presented for annual statistics released in June each year.
  2. Financial transactions and other changes in financial derivatives positions are available 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 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 on BEA's website.

U.S. assets increased by $629.2 billion, to a total of $29.41 trillion at the end of the third quarter, reflecting increases in portfolio investment and direct investment assets that were partly offset by decreases in other investment assets and in financial derivatives (chart 2). Portfolio investment assets increased by $684.7 billion, to $13.07 trillion, and direct investment assets increased by $370.8 billion, to $8.32 trillion, driven mainly by the appreciation of major foreign currencies against the U.S. dollar and by foreign stock price increases that raised the value of these assets.

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

Chart 2. U.S. Assets, line chart

[Click chart to expand]

U.S. liabilities increased by $1.49 trillion, to a total of $43.36 trillion at the end of the third quarter, reflecting increases in portfolio investment and direct investment liabilities that were partly offset by decreases in financial derivatives and in other investment liabilities (chart 3). Portfolio investment liabilities increased by $967.8 billion, to $23.01 trillion, and direct investment liabilities increased by $762.3 billion, to $10.85 trillion, driven mainly by U.S. stock price increases that raised the value of these liabilities.

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

Chart 3. U.S. Liabilities, line chart

[Click chart to expand]

The U.S. international investment position statistics for the second quarter of 2020 have been updated to incorporate newly available and revised source data (table B).

Table B. Updates to Second-Quarter 2020 International Investment Position Aggregates
[Billions of dollars, not seasonally adjusted]
Type of investment Preliminary estimate Revised estimate
U.S. net international investment position −13,045.9 −13,084.6
U.S. assets 28,872.8 28,779.1
Direct investment at market value 7,942.5 7,945.0
Portfolio investment 12,392.3 12,388.4
Financial derivatives other than reserves 2,750.8 2,750.8
Other investment 5,202.1 5,109.8
Reserve assets 585.1 585.1
U.S. liabilities 41,918.6 41,863.7
Direct investment at market value 10,097.2 10,090.1
Portfolio investment 22,033.3 22,046.8
Financial derivatives other than reserves 2,728.6 2,728.6
Other investment 7,059.6 6,998.2