May was the sector's worst month since the financial crisis of 2008.
The public withdrew NIS 4.5 billion from equity and debt mutual funds in May 2011. May was the financial factor's worst month since the financial crisis of 2008. Mutual funds' aggregate assets under management fell by NIS 1.8 billion in May - half through withdrawals and half due to a reduction in value of assets.
Mutual funds had NIS 900 million in net withdrawals in May: NIS 3.4 billion withdrawn from equity and debt funds, offset by NIS 2.5 billion deposited in money market funds. However, if the NIS 1.1 billion deposited in makam (short-term Treasury notes) mutual funds, considered a conservative investment, withdrawals from equity and debt mutual funds totaled NIS 4.5 billion.
Distinguishing between the equity and debt mutual funds and money market and makam mutual funds is important, since the capital flowing into the latter is driven by their low and even zero management fees. It is quite reasonable to assume that without low management fees, some of the capital inflow would not go to the mutual funds industry at all.
Published by Globes [online], Israel business news - www.globes-online.com - on June 5, 2011
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