The average return of provident funds in January-November 2008 was minus 19.3%. The average return for the period, if the sector and operational provident funds are excluded, was minus 17.87%.
The absolute numbers look even worse: NIS 49.7 billion in the public's pension savings have disappeared, taking five years of accumulated savings with it.
Most of the public does not grasp the link between the provident funds' negative returns and their wallets. Many provident fund managers were panicking when they sent out their third quarter statements, but few investors actually make regular deposits and therefore receive only annual statements. The full extent of the problem will only become apparent in March, when all investors in provident funds receive statements on the performance of their investments. The fourth quarter and annual statements will include October, the worst month ever for provident funds.
How investors will react is not known, and the possibilities range from utter apathy to berserk rage and massive withdrawals.
November was merely a bad month for provident funds, with an average negative return of 2.11%. This is a solid performance compared with the average negative returns of 5.47% in September and 7.83% in October.
Only Altshuler Shaham's provident fund achieved a positive return in November, at 0.79%. However, its return to date for the year was minus 20.79%, putting it in 20th place in the rankings.
Infinity Group, run by CEO Amir Eyal, leads the year-to-date ranking. This does not mean that the company's provident funds had a positive year; it means that it was the least bad performing provident fund manager, with a negative return of 8.52%. The provident fund doubled its assets under management to NIS 449 million.
The provident funds of Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) are in second place, with a negative return of 0.31% in November and 10.98% year-to-date. It is followed by the provident funds of Perfect YNE Capital Markets Ltd., with a negative return of 13.27% in January-November; Ayalon Holding Ltd. (TASE: AYAL), with minus 14.63%; and DS Securities & Investments Ltd. (TASE:DSIN), with minus 15.29%.
Four other provident fund management companies had better than average returns for January-November: Psagot Investment House Ltd. with minus 15.49%; B. Waizer Investments & Management Ltd. with minus 16.38%; Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) with minus 16.89%; and IBI Investment House Ltd. (TASE:IBI) with minus 17.07%.
The worst performance was by the provident funds of Gaon Capital Markets Ltd. with a return of minus 23.1%; Quattro Investment House Ltd., with minus 21.92%; Millennium with minus 21.9%; and Meitav Group, with a return of minus 21.41%, putting it 21st place among the funds tracked by "Globes".
Published by Globes [online], Israel business news - www.globes-online.com - on December 30, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008