New Year’s 2006 saw the launch of several new mutual funds, most of which will invest overseas. The industry expects the market share of mutual funds investing overseas to grow.
Excellence Investments Ltd. (TASE:EXCE) has launched a new mutual funds concept: regional international mutual funds on the basis of an active index of international bourses. Regional international mutual funds reduce risk, because they are not dependant on a single country. Management fees for the new mutual funds will be less than usual.
Excellence’s new mutual funds are arranged by geographical region. The Excellence BRIC mutual fund specialized in emerging markets of Brazil, Russia, India, and China, which have high growth rates. The Excellence Europe mutual fund invests in European markets that are slowly emerging from recession.
Excellence has also launched the Excellence World mutual fund, which invests in global stock markets, especially in the US, where faster growth is expected, and in Japan, which is undergoing a wave of growth. The Excellence Pacific mutual fund will invest in a mix of developed and emerging markets, including Japan, South Korea, Australia, Hong Kong, and Singapore. Finally, Excellence has established the Excellence North America mutual fund, which will invest in Canada, the US, and Mexico, which together account for a third of the world’s GDP.
Leumi Pia Trust Management Co., recently acquired by Harel Insurance Investments Ltd. (TASE:HARL) for NIS 535 million, has converted its Pia Global Stocks into Pia Small Cap USA. Pia Small Cap USA will invest at least half its assets in small cap shares traded in the US, i.e. in the shares of companies with market caps of between $250 million and $1 billion. Leumi Pia also converted its Pia S&P 100 mutual fund into the Pia S&P 500 mutual fund, which will invest 75% of its assets in the S&P 500 index, one of the largest and most representative indices in the US stock market.
Leumi Pia also expanded the number of mutual funds offered to foreign residents from two to nine. These mutual funds are exempt from capital gains taxes. Israelis may invest in these funds, provided they pay capital gains taxes on the proceeds.
Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) subsidiary Clal Finance Batucha Ltd. has also launched international mutual funds. Clal Finance Batucha Investment Management Ltd., the parent company of Clal Finance Mutual Funds Ltd., recently acquired Paragon Capital, which specializes in managing foreign investments. Clal Finance announced the launch of two mutual funds: Batucha Maslul 20, which will invest up to 20% of its assets in foreign stocks and options, and the rest in foreign bonds; and Batucha Overseas Focus, which will invest most of its assets in foreign stocks and securities based on exchange traded funds.
Epsilon Investment House Ltd., owned by chairman and co-CEO Shmuel Frankel and co-CEO Ron Levkovich, yesterday announced the launch of seven new mutual funds, although not for international investment. One is an aggressive fund with 100% exposure to stocks and options. Another fund will invest at least half its assets in the Tel Aviv 75 index, and other shekel-based mutual funds will try to outperform short-term loans.
Published by Globes [online], Israel business news - www.globes.co.il - on January 3, 2006