Altshuler Shaham Penn
-3.48%
Base:1,410
opening:1,410
High:1,419
low:1,355
change:5,113,644
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It is the largest company in the field of provident and continuing education with a volume of managed assets of NIS 198 billion. Its leadership stems from years in which it led the table in yields and especially from the acquisition of Psagot provident funds and study funds – and as a result, billions of shekels of savers flowed into it. You said Altshuler you said good results.
But since the beginning of 2021 at Altshuler they have lost yields significantly due to decisions that later turned out to be wrong, including the large investment in China. If everyone managed to bring in an annual return of 14% last year then Altshuler was at the bottom with only 10%. So in the last two months Altuschler has reset its position in China and in March – for the first time in a long time – their yields are no longer at the bottom (here and here). But when does the public respond? right now. After the negative returns have already been recorded, the public decides to leave. Is that smart? Really not sure. Eventually there is a convergence to the average (i.e., those who were down may go up, and those who were up may find themselves next year down – just as happened to Altshuler himself). Altshuler was mostly above average, a year and a bit hard lowered to the bottom, but his “natural” place is probably more up.
But on the other hand, this is exactly what Altshuler Shaham themselves did: they sold the position in China precisely after the big declines there – the market fell by tens of percent, while technology stocks also fell by 50% and more. It is of course impossible to know what a day will bring but what can happen is that the Chinese market will recover and then it will turn out that Altshuler snatched the falls on the one hand but will not enjoy the rises on the other. But Altshuler could no longer withstand the pressure, selling the case and fixing the loss. Was that smart? In March it worked for Altshuler, and the savers redeemed – missed that this time he was at the top.
Altshuler Shaham did not withstand the pressure and made the same classic mistake of the public on the stock market?
There are those who would say that Altshuler actually made the same mistake that the public makes on the stock market now: people buy when the market is up and when the falls come it does not withstand the pressure and sells just to save some of its money – and actually loses the rises that follow. It is impossible to time the market. No one knows when the declines will end and the rises will begin, so – if you invest long term it should not change you what happens along the way and you should not sell in falls and set losses. True, the risk is there, as is the fear that the declines will continue. But this is exactly the capital market and what it knows how to offer: interest-rate compensation and an increase in the value of the risk you are willing to take on. Risk and chance go together.
And yet the money went out of Altshuler and it could hurt him and his savers as well
And yet – NIS 5.2 billion was redeemed in March and there is a huge gap in the management of funds. When you are a body that has redemptions, you are forced to exercise, even if you are not interested and you may generate losses for your portfolios (as a result of sales). So not sure it’s at an alarming rate, but it’s no longer a trivial matter. Last year, the hardest hit, Altshuler lost only NIS 5.1 billion, and now in one month – the loss of assets is great.
Purchasing peaks have boosted Altshuler’s earnings pace
In recent reports, Altshuler Shaham Investment House has already reached a profit rate of NIS 280 million per year and a profit multiplier of 10. The company entered NIS 390 million in the quarter, during which it added 35,000 people to the pension. The market share was 31% at the end of the year – still the largest in the market. Market share in pension deposits: 8.4% compared to 5.1% at the end of 2020.
The reason for the jump in profits is the decision to purchase Psagot Investment House. Altshuler did not buy the returns of the peaks, they were really not something (and the laughter of fate – this is exactly what happened later also to the returns of Altshuler) but their savers. Instead of working hard to get more customers, they simply bought the customers – and of course kept the growing part of the study funds. It was definitely one of the brilliant moves of the year, and if they had not screwed up in returns this would definitely have registered them as one of the good years.
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