All 56 provident funds monitored by "Globes" posted positive returns in May 2008. Returns ranged from 0.49% for Yesodot Provident Fund, owned by Excellence Investments Ltd. (TASE: EXCE), to 2.63% for Gemel Clali Bet, owned by Analyst IMS Investment Management Services Ltd. (TASE:ANLT). In January-May, only six small provident funds posted positive returns, while the returns by all the large funds were negative. Unless there is a stock market rally later this year, most provident funds will probably report negative nominal returns for the year.
The provident fund rankings for January-May show that, among the small provident funds, with NIS 300 million to NIS 1 billion in assets under management, Telem Provident Fund, owned by Halman Aldubi Ltd. rose to first place, with 4.05% in January-May. It had a return of 1.16% in May. Halman Aldubi recently closed its acquisition of Telem, which manages NIS 659 million, from Bank Yahav for Government Employees Ltd.
Yesodot was in second place, with a return of 3.91% in January-May, but was ranked last in May, with a return of 0.49%. Yesodot has NIS 413 million under management. Halman Albudi's Harish Provident Fund was in third place, with a return of 3.04% in January-May. All three of the these provident funds mainly invest in low rated or unrated bonds and have few stocks in their portfolios.
The provident fund rankings for January-May show that, among the large funds with more than NIS 1 billion under management, Gadish Provident Fund, owned by Psagot Investment House Ltd., had the highest monthly return for the second consecutive month. The fund, Israel's largest with NIS 20.3 billion in assets under management, with a negative return of 0.2% in January-May, despite a positive return of 1.57% in May. Despite the performance, Gadish members are continuing to withdraw their deposits, pulling out an additional NIS 120 million in May. Little of this money was reinvested in other provident funds.
DS Securities & Investments Ltd.'s (TASE:DSIN) Gemel Provident Fund was ranked in second place in January-May, with a negative return of 0.31%, despite a positive return of 1.57% in May, the same as Gadish. Gemel Provident Fund has NIS 1.6 billion under management. DS's Tagmulim Provident Fund was in third place, with a negative return of 0.35% in January-May, and a positive return of 1.31% in May. Tagmulim has NIS 4.33 billion under management.
Most Tagmulim's members are IDF regular officers and NCOs and employees of Bank Hapoalim, which is why Gadish charged until recently negligible management fees. Gadish's management fees are the lower than the industry average, since raised its fee to 0.8% of assets managed.
Published by Globes [online], Israel business news - www.globes-online.com - on June 22, 2008
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