The fund industry is close to NIS 400 billion, with assets worth NIS 398.5 billion, an increase of more than 50% from its low point at the end of March 2020, when it stood at about NIS 255 billion.
Mutual fund industry assets increased in 2021 by about NIS 68 billion, which is about 20% of their size at the beginning of the year.
This, after a year (2020) of shrinkage in the amount of about NIS 22 billion (about 6% of its increase at the beginning of 2020).
The increase in 2021 is the result of a raising of approximately NIS 28 billion and an increase in value of approximately NIS 40 billion.
Traditional active funds raised about NIS 25 billion, about 15% of their assets at the beginning of the year.
The mutual funds redeemed about NIS 6 billion, which constitutes about 27% of their assets at the beginning of the year.
The imitation funds raised about NIS 12 billion.
Raising about NIS 1.4 billion for industry in December.
The year 2021 opened with a positive trend while continuing the aggressive expanding policy on the part of the central banks. The leading indices in Israel and around the world continued to provide very high returns in the new year, with the mutual fund industry benefiting from very handsome fundraising in January-May, amounting to NIS 22 billion, raising only NIS 2.7 billion from the industry’s revenue last year.
As of June 2021, when a total fundraising of about NIS 2.5 billion was recorded, there was a slowdown in fundraising, which expressed: a mixed trend of fundraising in traditional active funds and redemptions in passive funds.
This slowdown later turned into a short-lived trend in the entire industry in the “leadership” of passive funds. Thus, in July and August, NIS 870 million was raised in July and, for the first time since the beginning of the year, a revenue of NIS 110 million was raised in August. In September, the industry returned to raise NIS 670 million.
In the last quarter of 2021, the Fed announced a gradual reduction in bond purchases and towards the end of the year even doubled the rate of reduction. His policy towards inflation and announced interest rate hikes at the end of which the interest rate will stand at about 2% by the end of 2023.
Although inflation occupied the markets a lot in the last quarter of the year, the Corona Delta variant, followed by the Omicron, brought new-old concerns to the markets. With the two scales of inflation and the various variants, the industry enjoyed handsome fundraising of about NIS 8 billion in October-December.
The S & P500 rose sharply by 26.9%, the Nasdaq rose 21.4%, and the German DAX rose 15.8%.
The Tel Aviv 35, Tel Aviv 90 and Tel Aviv 125 indices recorded the highest returns in one year compared to the major stock indices in the world: approximately 32%, approximately 33.1% and approximately 31.1%, respectively.
In the local corporate bond market, the Tel Bond 60,40,20 indices concluded a year with a very strong positive return of about 8.4%, 7.4%, and 7.8% respectively. The general government bond index recorded a slight increase of approx. 2.3%, with a large gap between the CPI-linked: about 7.4%, and the unlinked shekels: about 0.8%.
The dollar continues its weakening trend against the shekel, despite its strength against other currencies in the world, and ends the year with a decline of about 3.2%.
As for mutual funds, the fund industry sums up a great year that was characterized by very nice fundraising of about NIS 28 billion, of which about NIS 25 billion in traditional active funds Fundraising of about NIS 12 billion in mutual funds versus redemption of about NIS 3 billion in mutual funds, and revenue Of about NIS 6 billion in mutual funds.
Thus, if at the beginning of the year the industry’s assets amounted to a total of NIS 330.6 billion, then it closes 2020 with assets worth NIS 398.5 billion, a huge increase of about 20%.
This increase is the result of a raising of approximately NIS 28 billion, and an increase in value of approximately NIS 40 billion.
The active industry grew by 18.5%. Within the passive industry, there was a significant difference between mutual funds that grew in their assets by 35.3%, and mutual fund assets that grew by only 16.6%, due to a year that amounted to redemptions in mutual funds, which was offset by increases in stock markets in Israel and abroad. Mutual fund assets are concentrated in these categories.
The active industry
The active industry was characterized by a mixed trend – impressive fundraising in the traditional funds of about NIS 25 billion, while the trend of redemptions in the financial funds of about NIS 6 billion continued. In the first half of 2021, the traditional funds raised a total of about NIS 16.3 billion, a trend that continued in the second half of the year but more moderately, with a raising of about NIS 8.7 billion.
The mutual fund industry recorded strong redemptions this year as well, which constitute about 27% of their assets at the beginning of the year and amount to about NIS 6 billion. This amount includes the outflow of funds from both the shekel funds (more than half of the amount) and the dollar funds (less than half of the amount). It should be noted that the dollar funds suffered a negative return of about 1.5%.
And as for the investment categories. Preliminary warning sentence: At the end of June 2021, the Securities Authority froze the daily publications of the funds until mid-September due to the activation of the so-called “outline”. , It is possible that the data regarding recruitments or redemptions in different categories at the annual level are not accurate but they are supposed to be very approximate.
The most fundraising category in 2021, of course, is a general bond category that constitutes about 70% of the total fundraising in traditional active funds this year, with a fundraising of about NIS 17.7 billion. Which is a mixture of stocks and bonds in varying doses.
Government bond funds are ending a strong positive year, with an estimated raising of NIS 3.1 billion.
Corporate and conversion bond funds are also ending a year of very handsome raisings, in the amount of about NIS 2.9 billion. Raisings that were fairly evenly distributed between the months of the year.
In the equity funds (Israel + abroad + flexible funds), a total raising of NIS 2.6 billion was recorded, almost all of which reached the equity funds in Israel in the amount of NIS 2.3 billion, part of the flexible funds in the amount of NIS 250 million and the other part From the overseas share category of approximately NIS 50 million. This distribution of amounts interfaces with the very high returns achieved by Israeli stock indices both absolutely and relative to major stock markets in the world.
The most redeemed category in 2021, until the middle of the year, was bonds in Israel – shekels, but was later replaced by the bond category abroad, which began in March. NIS million.
The passive industry
At the passive industry level, 2021, following its predecessor, was characterized by a mixed trend of fundraising and redemption of mutual funds, with mutual funds raising about NIS 12 billion and mutual funds ending the year with redemptions of about NIS 3 billion. The redemptions in the mutual funds are certainly exceptional in a year that has been excellent in its returns, and they have resulted crucially from regulatory constraints of what have been called “related entities.”
In the funds that mimic the raising, it was divided between the funds that specialize in shares in Israel and abroad, which raised about NIS 2.1 billion and about NIS 5 billion, respectively, and the corporate and conversion bond category, which continues to stand out in the industry and ends the year with the largest raising of NIS 5.6 billion. .
In addition to the redeemable funds in the imitation funds, redemptions totaling NIS 700 million were recorded. Redemptions were recorded in the government bond category, which redeemed NIS 410 million, despite a modest annual increase of 2.3% in the government bond index, a general bond category with a redemption of NIS 130 million and a foreign bond category. Added about NIS 160 million to revenue.
Alongside the raised mutual funds, there is one category: government bonds with a raising of about NIS 270 million. The general bond category ended the year without raising, with investors clearly preferring to invest in these two categories in active funds.
Alongside the redemption funds in the mutual funds, the equity funds abroad with about 75% of the total revenue of the mutual funds, in the amount of about NIS 2.3 billion. The equity funds in Israel also redeemed an amount of about NIS 360 million. L, which is quite small, redeemed in all months of the year, except January, thus ending the year with a redemption of about NIS 340 million and a bond category in the Land of Companies and Conversion, which, in contrast to its high fundraising, ended the year with zero funding.
As of December 30, 21, Thursday, the last trading day, the volume of assets of the fund industry stands at approximately NIS 398.5 billion. This figure is divided as follows:
Active industry: about NIS 224 billion, of which about NIS 207.5 billion in traditional funds, and about NIS 16.5 billion in monetary funds.
Passive industry: about NIS 174.5 billion, of which about NIS 105.5 billion in mutual funds, and about NIS 69 billion in imitation funds.
Monthly Summary: December 2021
The fund industry raised about NIS 1.4 billion in the last month of the year, one of the weakest months during the year.
The traditional active industry has raised about NIS 800 million.
On the other hand, the mutual funds continued to redeem, an amount of approximately NIS 210 million.
The passive industry was very quiet with the raising of about NIS 370 million for the imitation funds and about NIS 470 million for the mutual funds.
December was a positive month for the world’s major stock markets, despite the declarative change at this stage in the Fed’s policy.
The Israeli stock market stood out very well with particularly high monthly returns, with the Tel Aviv 35, 125 and 90 indices achieving returns of 6.1%, 5.2% and 3.9%, respectively.
European stock markets also achieved very good returns, with the German DAX: 5.2%, and in Asia: about 3.5% for the Japanese Nikkei.
In the US, there was a large gap between the yield on the Dow, which is more representative of the traditional economy with about 4.4%, and the yield on the Nasdaq, which is more representative of the technology companies, with about 0.7%, while the S & P500 index rose by about 4.4%.
Government bonds in Israel achieved a negative return of 0.7% and corporate bonds achieved a modest positive return of 0.3%.
When it comes to mutual funds it has been a quiet month, certainly compared to what we have become accustomed to in recent years in the last month of the year.
The traditional active industry raised about NIS 800 million, while the raising continues to lead the general bond category with about NIS 800 million, followed by the equity funds that specialize in Israel, which raised about NIS 320 million.
Corporate bond funds and government bond funds have raised an amount of about NIS 180 million and about NIS 80 million, respectively, low amounts compared to their raising in recent months.
On the other hand, funds specializing in foreign bonds suffered from the weakness of the dollar, which was reflected in a large redemption of NIS 300 million, and equity funds specializing in foreign countries suffered from market weakness in the first half of the month and redeemed NIS 220 million.
The passive industry was also very quiet, raising only about NIS 370 million for imitation funds and about NIS 470 million for mutual funds. Similar to the active industry, raisings were recorded for equity funds that specialize in Israel, and redemptions in equity funds that specialize abroad.
Here, too, as in the active industry, fundraising has been recorded for mutual funds that specialize in government bonds, while in corporate bond funds, there has been entry into mutual funds and exit from mutual funds.
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