By combining micro supervisory and security-by-security statistics with fund-by-fund market data, the paper analyses the characteristics of the foreign investment funds held by Italian households in the period 2008-2017. The main contribution consists in the application of the look-through approach to the portfolio of each fund in which Italian households invested, providing novel evidence on the final destination of households' investments by country, sector and type of financial instrument.
From 2008 to 2017 the foreign funds in which Italian households invested were essentially open-end harmonized funds and exchange traded funds. The main asset classes underperformed on average in relation to the corresponding market benchmarks. The total cost of these funds measured by the Total Expense Ratio for the year 2017 was about 1.5%; the overall net return was 4.6%. Through foreign investment funds, at the end of 2017 Italian households held investments in about 150 countries; the United States was the main destination country.
