2009 saw a turnaround in the Israeli exchange traded funds (ETF) sector. The year began with eight major players in the market, and ended with seven. Two ETF management companies disappeared (Prisma Investment House and PAI Finances Ltd. (TASE: PAIF) and one company entered it (Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) unit Harel SAL Ltd.

2009 was also the year in which awareness about ETF's increased and when the regulators swung into action in the market.

During 2009, ETFs' aggregate assets under management rose 1.7-fold from NIS 30 billion at the end of 2008 to NIS 47 billion at the end of 2009. NIS 8.7 billion of the increase was due to capital raised by the funds during the year.

2009 saw KSM Sal Indices Certificates Ltd., owned by Excellence Investments Ltd. (TASE: EXCE), increase its share of the ETF market, partly through the acquisition of Prisma's ETFs as well as by raising NIS 2.1 billion.

Wholly-owned Israel Discount Bank (TASE: DSCT) subsidiary Tachlit Investment House Ltd. was in second place, which boosted its ETF market share to 24.6%, after raising NIS 1.74 billion during the year.

Psagot Investment House Ltd. continued to quietly and effectively to boost its ETF business, Psagot Basket Certificates Ltd., to third place, with a market share of 14.1% after raising NIS 1.78 billion during 2009.

Two companies further down in the rankings stood out in 2009, Index Sal Ltd. raised the largest amount of money - NIS 2.6 billion - even though it had only a 10% share of the ETF market at the end of the year. The company tripled its assets under management by the end of the year. Harel Sal Ltd. passed the NIS billion shekel assets under management threshold in its first year in business and achieved a 2.5% share of the ETF market.

Published by Globes [online], Israel business news - www.globes-online.com - on January 4, 2010

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