Sources inform ''Globes'' that Meitav Investment House Ltd. has prepared for the coming into effect of Amendment 15 of the Joint Investment Trust Law (5754-1994), which regulates the activity of foreign funds in Israel. It signed exclusive cooperation agreements with foreign fund managers. Meitav will represent, among others, US asset manager AllianceBernstein Investments Inc., which has over $500 billion in assets under management; UK fund manager Henderson Global Investors Ltd., which has over $100 billion in assets under management; and Swiss & Global Asset Management AG, which has almost $100 billion in assets under management.
Meitav will market various classes of funds, such as high-yield bond funds, and emerging markets stocks funds. Meitav VP Oren Kaplan will manage the new business. He currently manages Meitav Indices (exchange traded funds and index funds). He said, "At this stage, foreign funds will only be marketed to institutional investors, but when the amendment passes, it will be possible to distribute them to the general public. We're talking about funds that manage more than a trillion dollars altogether, and are considered leaders in their fields."
Amendment 15 regulates the operations of foreign funds in Israel. It stipulates that foreign fund managers must have a representative in Israel. Collaboration with Meitav meets this requirement, and Meitav intends to provide all the necessary material to the banks that distribute the funds.
Meitav recently hosted several senior executives of foreign funds, and arranged meetings with Israeli financial institutions. The institutions do not normally invest in foreign funds, mainly because of the cost, and because they do not need the active management of a competitor.
Nonetheless, according to the Ministry of Finance's Gemel-Net (provident fund performance website), provident funds' holdings in mutual funds doubled within a year to 2.8% of assets, or about NIS 4.8 billion. While only a small amount, Meitav hopes that the allocation of funds overseas will continue.
In addition, foreign funds tend to have low management fees ranging from 0.5% for fixed-income funds to 1.5% for stock-based funds. In contrast, Israeli mutual funds that invest in foreign securities charge 1.5-3%. Foreign funds also allow differential management fees, lowering the fees for larger amounts.
Published by Globes [online], Israel business news - www.globes-online.com - on February 1, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011