Mutual funds raise record net NIS 55b in 2013

Assets under management totaled NIS 236 billion at the end of 2013, 36% more than a year earlier.

Israel's mutual funds industry chalked one of the best years in its history last week. Mutual funds raised a record net NIS 55 billion in 2013, more than double the previous record. Assets under management totaled NIS 236 billion at the end of 2013, 36% more than a year earlier.

Investors' appetite for risk was strongly whetted during 2013, and was reflected in the capital raised by equity mutual funds. Investors in these funds, which raised a net NIS 5 billion in 2013, had the highest average return on their investment in the industry. Israeli equity mutual funds achieved an average return of 23% in 2013, and foreign equity mutual funds had an average return of 12.5%.

Despite the strong returns, the net capital raised by equity mutual funds accounted for less than a tenth of the net capital raised by the industry. General debt mutual funds raised a net NIS 22 billion, 66% of the total amount raised, and achieved an average return of 7%. This investment instrument raised substantial capital due to the popularity of 90/10, 80/20, and similar mutual funds, which investment advisers preferred to use to increase exposure to stocks.

Money market funds raised a net NIS 19 billion in 2013, 36% of the total. These funds are popular because they are exempt from custodian fees, but their average return was just 1.4%. Corporate bond mutual funds raised a net NIS 8 billion in 2013, 17% of the total.

Conversely, government bond mutual funds and foreign bond mutual funds saw NIS 1.8 billion and NIS 1.2 billion in net withdrawals in 2013, respectively. Foreign bond mutual funds were the only sector with a negative return last year, averaging minus 3.3%.

Psagot no longer at the top

Meitav DS Holdings Ltd. (TASE:MTDS) became the biggest company in the mutual funds industry following the merger of DS Apex and Meitav Investment House. It topped the rankings, raising a net NIS 9.5 billion in 2013 for its mutual funds and a net NIS 6.2 billion for its money market funds (despite NIS 1.2 billion in net withdrawals in December).

Yelin Lapidot Investment House Ltd. was in second place, raising a net NIS 7.6 billion, mostly by its equity and debt mutual funds, which raised the most capital in their category.

Psagot Investment House Ltd. raised a net NIS 6.2 billion for its mutual funds, including NIS 4.6 billion by equity and debt mutual funds.

Published by Globes [online], Israel business news - www.globes-online.com - on January 2, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018