April was a month of sobriety in the markets. The first US interest rate hike and statements by US Federal Reserve leaders have led to an understanding that interest rates are expected to rise faster than expected and that inflation will not disappear so quickly. The rest is due to the understanding that our interest rate will rise at a slower pace, thanks to lower inflation than the world. However, weakness was felt in the fund industry.
Scope of industry Mutual funds (Managed andImitations) Decreased in April by NIS 3.7 billion, mainly due to impairment. In contrast to the gaps we saw in previous months, in April the decline in the value of assets was similar between managed funds (NIS 1.8 billion) and imitation funds (NIS 1.9 billion). In mutual funds, the volume of assets decreased by NIS 2.7 billion, mainly due to the declines in world markets (and NIS 600 million was raised in equity mutual funds).
The one who returned to the top of the recruiters’ rankings is Capital Markets TowerWith a raising of NIS 383 million in April and more than NIS 600 million from the beginning of 2022. Remember, the investment house headed by Sagi Stein led the raising for about two years in a row, until it lost its premiere in October 2021 toYellin Lapidot. The latter continues in its good period, when it raised NIS 285 million in April, and in total since the beginning of the year, Yellin Lapidot’s mutual funds have raised NIS 944 million. The small investment house Forrest also recorded a good new year with NIS 176 million raised in April, more than double than in the first three months of the year.
On the other hand, the side of the pods is again Altshuler Shaham, With redemptions of NIS 733 million in April and NIS 3.86 billion since the beginning of the year. Since last November, there has been a redemption of more than NIS 500 million every month. More among the pods are Best Dash (Half a billion shekels in April) and Harel, which ended the month with a relatively small revenue, but looking at the first four months, NIS 876 million has already been redeemed from its funds.
“Maturity is evident among investors, who were not frightened by what is happening abroad”
Lior Kashrian, CEO of Migdal Mutual Funds, said in light of the positive raises that “the stock market in the country has shown strength again, and those who had investments in value stocks enjoyed it, especially in the infrastructure industry that performed excellently, but also in basic consumption that showed good performance. Tower Capital Markets has good products in these segments, so we were able to raise quite a bit of money in the past month and minimize the outflows of funds to overseas products.
As Ryan notes that additional funds that benefited from an increase in April are those investing in defense industries around the world, as part of the trend of increasing defense budgets following the war in Ukraine, and he estimates the sector will continue to grow in the coming year. “These are value companies, and it works out for investors with the transition from growth stocks to value stocks. Attention should also be paid to the tourism and leisure stocks that are returning to the forefront.
Lior Kashrian / Photo: PR-Eliran Avital
“In Europe we have seen a recovery of both airlines and hotels, and so has the US, and these are companies that have a lot more room to go up compared to where they were before the Corona. “We have recently seen institutional players begin to take a position in the tourism market, and if the Corona is indeed behind us, we should see a flourishing in the worlds of tourism in the coming year,” Kashrian explained.
“Overall, the results in the fund industry show that there is no panic and there is maturity among investors, who were not frightened by what is happening abroad. “There is no outflow of funds due to the increase in risk, but we have seen changes in portfolios such as the exchange of foreign shares for shares in Israel,” Kashrian added. “I am optimistic looking ahead mainly because the industry here is going through the crisis without redemptions.”
Tel Aviv continued to stand out in the over-performance of the stock market
As mentioned, in the past month, the Israeli stock market once again stood out above the leading indices in the world, especially those in the United States, but at the beginning of May it had already joined the negative trend. Tel Aviv 35 Traded in April with almost no change and since the beginning of the year has completed a modest decline of only 2%, at qNASDAQ Lost 13% in April and recorded its worst month since 2008, when some of the big growth and technology companies released disappointing reports and dragged the entire sector. NASDAQ concluded the first four months of 2022 with a negative return of 21.2%, which officially puts it in the territory of the “bear market”. S&P 500 Recorded more moderate declines of 8.8%, and since the beginning of the year has weakened by 13.3%.
The strength of the stock market in Israel is also evident in the category’s performance throughout the entire quarter. Thus, the Israel equities category is the only one with the positive performance in April, along with the foreign currency-exposed foreign currency category (which was mainly affected by the strengthening dollar in the world). With equity exposure, whose median yield is higher than that of the non-equity general bond category. In this sense, April was another month that signaled to solid clients that a convenient solution for them might be to increase the stock component in the investment portfolio.