The fund industry, which manages NIS 352 billion, mimicked an average of 2.5% in May, while earlier in the month the funds were already on the verge of losing 5%. The sharp declines caused the public to spend money, when the indices in Israel fell by 6-10%, but abroad they actually ended the month in balance. He sees declines in the stock market close to home, and less so when the declines are overseas.
The summary of the public’s movements indicates net revenues of about NIS 3.87 billion (including the mutual fund industry). Since the beginning of the year, the mutual fund industry has recorded redemptions of about NIS 6.6 billion.
The rise in interest rates causes losses in bond funds
Even before the rise in interest rates the public had to fear that it was on the way. Bond mutual funds lost holders a high return, and it was written giant on the wall – black on white: raising interest rates causes bonds to fall. The longer the bond, the greater the risk, and therefore the lower it is, which means that the loss to investors in them is greater. When you need them? What a scam. It’s a herd that goes to the slaughterhouse with a clear knowledge. This of course will depend on the rate of interest rate hikes here.
The great executives – Meitav and Altshuler bled more than a billion shekels
The largest body in terms of funds managed in the fund industry is Meitav, which manages NIS 57.7 billion, but therefore it also absorbed the largest redemptions in May: NIS 1.15 billion. The second body is magic that after shuffling since the beginning of the year – managed to open burners in May and raised NIS 1.3 billion, when in fact it is the only one that managed to raise, and it closes the month with managed assets amounting to NIS 52.9 billion. Migdal Capital Markets in third place redeemed NIS 675 million in May and its assets amount to NIS 46.7 billion, and the fourth is Psagot with redemptions of NIS 295 million and assets of NIS 45.3 billion.
Since the beginning of the year, Altshuler has been losing almost NIS 5 billion, Meitav is losing almost NIS 2 billion, Harel is the third to lose NIS 1.4 billion, followed by Ayalon with a loss of NIS 700 million. 
Yellin Lapidot is the only company that has been recruiting from the beginning of the year among the major executives in the field of traditional mutual funds. Magic loses money in traditional funds
The interesting story in the case of Magic is that it is not really that different from all the others. In managed funds (where management fees are high) magic has bled money like any other. In fact, it lost NIS 500 million in the field, with only Meitav (revenue of NIS 733 million) and Altshuler (revenue of NIS 1.07 billion) redeeming more than it.
The table illustrates a few other interesting points – Yellin Lapidot who manages only active mutual funds and consistently raises funds – is the leader in fundraising since the beginning of the year and the largest in the field of traditional funds. In recent months, Yellin has overtaken its close competitor (in the entire financial management industry) – Altshuler Shaham, where it continues to suffer large-scale redemptions that amounted to NIS 1.07 billion in May and NIS 4.9 billion since the beginning of the year. Other entities with significant redemptions since the beginning of the year: Moore with redemptions of NIS 580 million, Harel with redemptions of NIS 800 million, Psagot with redemptions of NIS 965 million, Kesem with redemptions of NIS 792 million and Meitav with redemptions of NIS 1.47 billion since the beginning of the year.
Where did Magic recruit? In the mutual funds, the indices mimic
So where did the recruitments at Magic come from? The mutual funds mimic the indices – where managers have no discretion, and the public is a passive, living and forgotten investor. The rationale is that fund managers do not really know how to generate an excess return on the indices over time so there is no reason to try and find the lone successful manager who might succeed, and it is better to just buy the whole market.
So true, Kesem raises mostly in mutual funds where it receives relatively low management fees, but it still receives a nice share of management fees since it is the largest in the field and manages NIS 27.4 billion, half of all its funds. Meitav is the second with NIS 22.5 billion in the category. Psagot is third with NIS 16.7 billion and has been relatively stable since the beginning of the year. The fourth Harel fails to maintain stability and loses NIS 151 million this month and NIS 734 million since the beginning of the year.
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