The past two months will be remembered as one of the worst periods ever for Israel's mutual funds. In October, mutual funds' aggregate assets under management shrank by NIS 8.5 billion to NIS 100.4 billion. Almost NIS 5 billion of the reduction was due to withdrawals.
In September, mutual funds' aggregate assets under management shrank by NIS 6.5 billion, including NIS 3.5 billion in withdrawals.
Altogether, mutual funds' aggregate assets under management shrank by NIS 15 billion over the two months, including NIS 8.5 billion in withdrawals.
The last time the mutual funds' aggregate assets under management totaled NIS 100 billion was in 2004, when Israel did not have money market funds, which now account for 28% of mutual funds' total assets. Excluding money market funds, mutual funds' aggregate assets under management now total NIS 72.3 billion, half their total of NIS 143.6 billion in June 2007.
For several months, the only type of mutual fund that has shown growth are money market funds, which now have an aggregate NIS 28 billion in assets under management. Equity and bond funds have been shrinking every month, with corporate bonds funds leading the way down. Corporate bonds funds shrank by NIS 4 billion in October and by NIS 23 billion since January. Israeli and foreign equity funds have each shrunk by NIS 6.3 billion since January.
In October, IBI Investment House Ltd. (TASE:IBI) was the only mutual fund management company to report net contributions in its mutual funds, not including money market funds. Two other mutual fund management companies also reported a net contributions in mutual funds, including money market funds: DS Apex Holdings Ltd. (TASE:DSAP) and Mercantile Discount Bank. Psagot Investment House Ltd., which was the industry leader in net contributions for its mutual funds in recent months, suffered a net decrease in October.
IBI reported NIS 109 million in net contributions, including NIS 8 million in money market funds, in October. IBI has NIS 5.96 billion in assets under management. Despite the net contributions, IBI's assets under management have shrunk by NIS 130 million since January.
Published by Globes [online], Israel business news - www.globes-online.com - on November 5, 2008
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