U.S. International Investment Position

Fourth Quarter and Year 2020

By Erin Whitaker  |  Volume 101, Number 4  |  April 19, 2021

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The U.S. net international investment position—the difference between U.S. residents' foreign financial assets and liabilities—was −$14.09 trillion at the end of the fourth quarter of 2020 (chart 1). Assets totaled $32.16 trillion and liabilities were $46.25 trillion. At the end of the third quarter, the net investment position was −$13.86 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 −$227.5 billion change in the net investment position from the third quarter to the fourth quarter came from net financial transactions of −$287.1 billion and net other changes in position, such as price and exchange rate changes, of $59.6 billion (table A).

The U.S. net international investment position was −$14.09 trillion at the end of 2020, compared to −$11.05 trillion at the end of 2019 (chart 1). The −$3.04 trillion change in the net investment position from the end of 2019 to the end of 2020 came from net financial transactions of −$743.6 billion and net other changes in position, such as price and exchange rate changes, of −$2.30 trillion (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, 2020:Q3 Change in position in 2020:Q4 Position, 2020:Q4
Total Attributable to:
Financial transactions Other changes in position1
U.S. net international investment position −13,864.6 −227.5 −287.1 59.6 −14,092.1
Net position excluding financial derivatives −13,891.6 −193.9 −289.7 95.8 −14,085.5
Financial derivatives other than reserves, net 2 26.9 −33.6 2.6 −36.2 −6.6
U.S. assets 29,516.5 2,639.5 (2) (2) 32,156.0
Assets excluding financial derivatives 26,971.3 2,638.9 121.4 2,517.5 29,610.3
Financial derivatives other than reserves 2,545.2 0.6 (2) (2) 2,545.7
By functional category:          
Direct investment at market value 8,340.1 955.5 −10.8 966.3 9,295.6
Equity 7,059.0 967.6 1.3 966.3 8,026.6
Debt instruments 1,281.1 −12.2 −12.2 (*) 1,268.9
Portfolio investment 13,080.4 1,592.2 82.1 1,510.1 14,672.6
Equity and investment fund shares 9,133.2 1,426.9 −5.0 1,431.9 10,560.1
Debt securities 3,947.2 165.3 87.1 78.2 4,112.5
Short term 679.0 39.4 35.0 4.5 718.4
Long term 3,268.2 125.8 52.1 73.7 3,394.0
Financial derivatives other than reserves 2,545.2 0.6 (2) (2) 2,545.7
Over-the-counter contracts 2,493.6 −2.2 (2) (2) 2,491.4
Single-currency interest rate contracts 1,995.8 −81.8 (2) (2) 1,914.0
Foreign exchange contracts 294.7 77.4 (2) (2) 372.1
Other contracts 203.1 2.2 (2) (2) 205.3
Exchange-traded contracts 51.6 2.8 (2) (2) 54.4
Other investment 4,929.6 85.2 47.8 37.4 5,014.8
Other equity 69.6 0.3 0.3 0.0 69.9
Currency and deposits 2,171.5 −21.0 −44.6 23.6 2,150.5
Loans 2,646.7 102.2 88.7 13.6 2,748.9
Insurance technical reserves n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 41.8 3.7 3.4 0.2 45.5
Reserve assets 621.2 6.1 2.4 3.6 627.3
Monetary gold 493.4 0.2 0.0 0.2 493.6
Special drawing rights 51.7 1.2 (*) 1.2 52.9
Reserve position in the International Monetary Fund 33.1 3.2 2.5 0.8 36.4
Other reserve assets 42.9 1.4 (*) 1.5 44.4
U.S. liabilities 43,381.1 2,867.0 (2) (2) 46,248.1
Liabilities excluding financial derivatives 40,862.9 2,832.9 411.2 2,421.7 43,695.8
Financial derivatives other than reserves 2,518.2 34.1 (2) (2) 2,552.4
By functional category:          
Direct investment at market value 10,847.4 1,122.3 67.7 1,054.6 11,969.7
Equity 9,132.3 1,134.7 84.0 1,050.7 10,267.0
Debt instruments 1,715.1 −12.4 −16.3 3.9 1,702.7
Portfolio investment 23,024.0 1,642.5 301.4 1,341.1 24,666.4
Equity and investment fund shares 10,143.9 1,535.1 258.5 1,276.7 11,679.0
Debt securities 12,880.1 107.3 42.9 64.5 12,987.4
Short term 1,233.0 −11.6 −12.3 0.7 1,221.4
Long term 11,647.0 119.0 55.2 63.8 11,766.0
Financial derivatives other than reserves 2,518.2 34.1 (2) (2) 2,552.4
Over-the-counter contracts 2,471.6 29.3 (2) (2) 2,500.9
Single-currency interest rate contracts 1,976.5 −74.3 (2) (2) 1,902.2
Foreign exchange contracts 290.3 95.9 (2) (2) 386.2
Other contracts 204.7 7.7 (2) (2) 212.4
Exchange-traded contracts 46.6 4.8 (2) (2) 51.5
Other investment 6,991.5 68.1 42.1 25.9 7,059.6
Other equity n.a. n.a. n.a. n.a. n.a.
Currency and deposits 3,729.3 67.9 61.9 6.1 3,797.3
Loans 3,002.6 −6.8 −25.3 18.5 2,995.8
Insurance technical reserves n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 209.9 5.8 5.6 0.2 215.7
Special drawing rights allocations 49.7 1.2 0.0 1.2 50.9
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 $2.64 trillion to a total of $32.16 trillion at the end of the fourth quarter, reflecting increases in all major categories of assets, particularly in portfolio investment and direct investment assets. Portfolio investment assets increased by $1.59 trillion to $14.67 trillion, and direct investment assets increased by $955.5 billion to $9.30 trillion, driven mainly by foreign stock price increases and, to a lesser extent, the appreciation of major foreign currencies against the U.S. dollar that raised the value of U.S. assets in dollar terms.

Both financial transactions and other changes in position contributed to 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 $2.87 trillion to a total of $46.25 trillion at the end of the fourth quarter, reflecting increases in all major categories of liabilities, particularly in portfolio investment and direct investment liabilities. Portfolio investment liabilities increased by $1.64 trillion to $24.67 trillion, and direct investment liabilities increased by $1.12 trillion to $11.97 trillion, driven mainly by U.S. stock price increases that raised the value of these liabilities.

Both financial transactions and other changes in position contributed to 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 third quarter of 2020 have been updated to incorporate newly available and revised source data (table B).

Table B. Updates to Third-Quarter 2020 International Investment Position Aggregates
[Billions of dollars, not seasonally adjusted]
  Preliminary estimate Revised estimate
U.S. net international investment position −13,950.2 −13,864.6
U.S. assets 29,408.3 29,516.5
Direct investment at market value 8,315.8 8,340.1
Portfolio investment 13,073.1 13,080.4
Financial derivatives other than reserves 2,545.2 2,545.2
Other investment 4,853.0 4,929.6
Reserve assets 621.2 621.2
U.S. liabilities 43,358.5 43,381.1
Direct investment at market value 10,852.4 10,847.4
Portfolio investment 23,014.6 23,024.0
Financial derivatives other than reserves 2,518.2 2,518.2
Other investment 6,973.2 6,991.5

The U.S. net international investment position was −$14.09 trillion at the end of 2020, compared to −$11.05 trillion at the end of 2019 (table C).

U.S. assets increased by $3.00 trillion to a total of $32.16 trillion at the end of 2020, reflecting increases in all major categories of assets, particularly in portfolio investment, financial derivatives, and direct investment assets. Portfolio investment assets increased $1.30 trillion to $14.67 trillion, and direct investment assets increased $496.9 billion to $9.30 trillion, driven mainly by the appreciation of major foreign currencies against the U.S. dollar that raised the value of U.S. assets in dollar terms and, to a lesser extent, by financial transactions. Financial derivatives increased $755.3 billion to $2.55 trillion, mostly reflecting increases in single-currency interest rate contracts.

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

U.S. liabilities increased by $6.04 trillion to a total of $46.25 trillion at the end of 2020, reflecting increases in all major categories of liabilities, particularly in portfolio investment, direct investment, and financial derivatives liabilities. Portfolio investment liabilities increased by $3.28 trillion to $24.67 trillion, and direct investment liabilities increased by $1.42 trillion to $11.97 trillion, driven mainly by U.S. stock price increases and, to a lesser extent, by financial transactions. Financial derivatives increased $782.1 billion to $2.55 trillion, mostly reflecting increases in single-currency interest rate contracts.

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 Position, 2019 Change in position in 2020 Position, 2020
Total Attributable to:
Financial transactions Other changes in position1
U.S. net international investment position −11,050.5 −3,041.6 −743.6 −2,298.0 −14,092.1
Net position excluding financial derivatives −11,070.7 −3,014.8 −740.3 −2,274.6 −14,085.5
Financial derivatives other than reserves, net2 20.2 −26.8 −3.3 −23.5 −6.6
U.S. assets 29,152.8 3,003.2 (2) (2) 32,156.0
Assets excluding financial derivatives 27,362.4 2,247.9 763.5 1,484.4 29,610.3
Financial derivatives other than reserves 1,790.4 755.3 (2) (2) 2,545.7
By functional category:          
Direct investment at market value 8,798.7 496.9 153.3 343.6 9,295.6
Equity 7,485.0 541.6 174.7 366.9 8,026.6
Debt instruments 1,313.6 −44.7 −21.4 −23.3 1,268.9
Portfolio investment 13,375.9 1,296.7 350.2 946.5 14,672.6
Equity and investment fund shares 9,459.1 1,101.1 299.7 801.4 10,560.1
Debt securities 3,916.8 195.7 50.5 145.1 4,112.5
Short term 734.0 −15.6 3.9 −19.5 718.4
Long term 3,182.8 211.3 46.6 164.6 3,394.0
Financial derivatives other than reserves 1,790.4 755.3 (2) (2) 2,545.7
Over-the-counter contracts 1,755.3 736.1 (2) (2) 2,491.4
Single-currency interest rate contracts 1,297.5 616.5 (2) (2) 1,914.0
Foreign exchange contracts 288.1 84.0 (2) (2) 372.1
Other contracts 169.7 35.6 (2) (2) 205.3
Exchange-traded contracts 35.1 19.3 (2) (2) 54.4
Other investment 4,673.4 341.4 251.0 90.4 5,014.8
Other equity 68.0 1.8 1.8 0.0 69.9
Currency and deposits 2,010.6 139.9 51.8 88.1 2,150.5
Loans 2,541.4 207.5 200.6 6.9 2,748.9
Insurance technical reserves n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 53.3 −7.9 −3.2 −4.7 45.5
Reserve assets 514.4 112.9 9.0 103.9 627.3
Monetary gold 396.1 97.5 0.0 97.5 493.6
Special drawing rights 50.7 2.2 0.1 2.1 52.9
Reserve position in the International Monetary Fund 26.2 10.2 8.8 1.4 36.4
Other reserve assets 41.4 3.0 0.1 2.9 44.4
U.S. liabilities 40,203.3 6,044.8 (2) (2) 46,248.1
Liabilities excluding financial derivatives 38,433.0 5,262.7 1,503.7 3,759.0 43,695.8
Financial derivatives other than reserves 1,770.3 782.1 (2) (2) 2,552.4
By functional category:          
Direct investment at market value 10,547.1 1,422.6 212.4 1,210.2 11,969.7
Equity 8,764.2 1,502.8 204.9 1,297.9 10,267.0
Debt instruments 1,782.9 −80.2 7.5 −87.7 1,702.7
Portfolio investment 21,389.8 3,276.7 760.0 2,516.7 24,666.4
Equity and investment fund shares 9,220.2 2,458.8 725.7 1,733.1 11,679.0
Debt securities 12,169.6 817.8 34.2 783.6 12,987.4
Short term 937.3 284.1 267.3 16.8 1,221.4
Long term 11,232.3 533.7 −233.1 766.8 11,766.0
Financial derivatives other than reserves 1,770.3 782.1 (2) (2) 2,552.4
Over-the-counter contracts 1,738.0 762.9 (2) (2) 2,500.9
Single-currency interest rate contracts 1,276.3 626.0 (2) (2) 1,902.2
Foreign exchange contracts 296.1 90.1 (2) (2) 386.2
Other contracts 165.7 46.8 (2) (2) 212.4
Exchange-traded contracts 32.2 19.3 (2) (2) 51.5
Other investment 6,496.2 563.5 531.4 32.1 7,059.6
Other equity n.a. n.a. n.a. n.a. n.a.
Currency and deposits 3,458.8 338.5 323.9 14.6 3,797.3
Loans 2,782.5 213.3 193.4 19.9 2,995.8
Insurance technical reserves n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 206.1 9.6 14.1 −4.5 215.7
Special drawing rights allocations 48.8 2.0 0.0 2.0 50.9
n.a.
Not available
  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 presented in table 1.2 of the International Transactions Accounts on BEA's website.