The month of February was negative in the stock and bond markets in Israel and money continued to flow out of traditional mutual funds. These redeemed NIS 4.8 billion, while on the other hand the funds continued to raise – another NIS 4.9 billion. This is almost twice as much as in January and the highest in 8 months. The passive industry also redeemed an amount of NIS 1.3 billion. But the fundraising in the banks did not help to change the picture of redemptions in the active and passive funds this month, and the industry ended the month of February with a total redemption of about NIS 1.2 billion and the total assets of the industry shrank in the month of February by about NIS 7.4 billion, a decrease of 2% from NIS 377.4 billion to -370 billion shekels, where part of the decrease is also explained by the industry’s negative return of 1.7% (and the rest are the redemptions).
“The negative trend in the stock and bond markets in Israel intensified and was manifested in mutual fund redemptions at a significantly higher rate than in January. This, together with a sharp increase in the yields to maturity of government and corporate bonds, says Shawn Ashkenazi, director of consultant relations at Meitav Investment House.
“In the US, after a rally in the stock market and some good inflation data in recent months, investors received a painful reminder in the data published about the “sticky” inflation and the strong economy. The interest rate forecasts derived from the bond market have been updated upwards, according to the Fed’s forecast.”
The traditional active industry in a cross-section of categories: the outflow of funds increases
According to Ashkenazi, the only significant raising categories in the traditional active industry were the overseas bond and overseas stock categories that raised an amount of approximately NIS 580 million and approximately NIS 130 million respectively. Leveraged and strategic categories and a fund pool raised much smaller amounts of approximately NIS 40 million and NIS 20 million respectively.
The general bond category, the largest category in its assets by a large margin than the other investment categories, ended the month of February with the largest revenue, and a significantly higher amount than previous months, of approximately NIS 3 billion, which is close to 4% of its assets.
A category of shares in Israel ended the month with a redemption of about NIS 890 million, which is about 5% of its assets. The trend of redemptions in the government bond category of the Israeli government continues and is also intensifying, when this month the category redeemed an amount of approximately NIS 870 million, which is approximately 4% of its assets.
The membership and conversion category redeemed an amount of approximately NIS 740 million, which is approximately 3% of its assets. The flexible funds category redeemed an amount of approximately NIS 140 million, which is slightly more than 3% of its assets.
Financial funds: slowdown in raising shekels, jump in raising dollars
The financial funds also raised a very high amount of NIS 4.9 billion this month. The shekel financial funds raised approximately NIS 3.1 billion and the dollar financial funds raised approximately NIS 1.8 billion. The large mobilization for the shekel funds stems from a series of interest rate increases, from their being a parking address for the funds that came out of the traditional funds, and from the significant tax advantage they have over investing in shekel deposits during this period of inflation, and this in addition to their liquidity advantage.
This month, following the sharp increase in the dollar/shekel exchange rate, a significant turnaround in fund raising occurred, with dollar funds raising a share of approximately 37% of the total funds raised. In the last eleven months, the financial funds raised a large sum of approximately NIS 43.1 billion and their market share increased from approximately 4.2% to approximately 16.5%. Their market share from the active fund industry alone (there are no monetary funds in the passive funds) is about 28.3%. However, their total assets (about NIS 61 billion) are only about 6% lower than their total assets when they were at their peak.
The passive industry – hedge funds and hedge funds
The month of February in the passive industry was also characterized by a negative trend, with a total redemption of approximately NIS 1.3 billion, with the redemption coming mostly from the basket funds that redeemed an amount of approximately NIS 900 million, the imitation funds added an amount of approximately NIS 430 million to the redemption.
The category of shares abroad, which raised the most this month in the passive industry, raised an amount of about NIS 1.1 billion, the imitation funds raised an amount of about NIS 650 million and the basket funds raised an amount of about NIS 450 million.
The overseas bond category, which also benefits from the investors’ search for dollar investment channels, raised an amount of approximately NIS 590 million this month. When an amount of about NIS 380 million came from the imitation funds, and an amount of about NIS 210 million came from the basket funds.
On the other hand, in everything related to financial assets in Israel, there was a trend of outflow of funds. The share category in Israel was the biggest loser in the passive industry this month, when it redeemed an amount of approximately NIS 1.5 billion, the basket funds redeemed approximately NIS 950 million and the imitation funds redeemed approximately NIS 550 million.
The companies and conversion category redeemed an amount of approximately 1.2 billion shekels, the imitation funds redeemed an amount of approximately 670 million shekels and the basket funds added approximately 500 million shekels to the redemption.
The state bond category redeemed an amount of approximately NIS 290 million. The imitation funds redeemed an amount of approximately NIS 190 million and the basket funds added approximately NIS 100 million to the redemption.
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