Israel's mutual funds industry saw a further reduction in assets under management in December, ending 2008 in deep crisis. Mutual funds' assets under management fell by NIS 23 billion last year to NIS 97.3 million, a five-year low, according to Israel Securities Authority figures.
Nearly NIS 10 billion of the reduction in assets was due to withdrawals, and the rest was due to falls in value. In December alone, the amount managed by the funds fell by NIS 500 million, though the fall was smaller than in the preceding months.
Excluding assets under management in money market funds, the situation of the mutual funds industry is even grimmer: its assets under management shrank by NIS 52 billion in 2008, a reduction of 46%.
Money market funds had NIS 32 billion in assets under management at the end of 2008, 33% of mutual funds' total assets, making money market funds the largest investment instrument. They are also the only funds that were able to raise capital last year, on an almost monthly basis.
In contrast, bond mutual funds lost NIS 27.6 billion in assets under management last year to NIS 14.7 billion at the end of 2008. In January 2008, these were the largest group of mutual funds, with NIS 42 billion in assets under management. Equity mutual funds lost NIS 7 billion in assets under management last year, to NIS 2.7 billion at year-end.
Mutual fund managers also saw changes in their market share in recent months. By December, the industry's map had completely changed: Harel Finance Ltd. rose to second place, and DS Securities & Investments Ltd. (TASE:DSIN) (which include the funds of Apex Ltd.) passed Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) to reach fifth place. Psagot remains top of the funds management ladder.
Published by Globes [online], Israel business news - www.globes-online.com - on January 5, 2009
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