A report by Meitav Investment and Securities Advisers Ltd. for 2004 shows that a high degree of concentration in Israel’s mutual fund industry. Ten bank-owned mutual funds, only 1.3% of the total number of funds, hold 22% of the entire industry’s assets.
Not a single non-bank owned fund is on the list of Israel’s 20 leading mutual funds: the Bank Hapoalim (LSE: BKHD; TASE: POLI) owns ten of them, the Bank Leumi (TASE: LUMI) group seven, and Israel Discount Bank (TASE: DSCT) subsidiary Ilanot Discount Ltd. three.
The 20 leading funds hold total assets of NIS 34 billion, accounting for 33.6% of the industry total.
The list of Israel’s 50 leading mutual funds includes only two private funds, despite impressive growth by private brokers in 2004, whose market share rose from 10% at the end of 2003 to 14.3% at the end of 2004.
Meitav also reported that all main categories of mutual funds, except for foreign currency funds, had positive net accumulation of assets in 2004. Although shekel instruments had the highest returns of all investment instruments in 2004, 75% of all money put into mutual funds was in local bond, state bond, and international bond funds. A check of capital raising dates showed that 75% of the money raised was in the first third of 2004, when the funds raised a total of NIS 10.3 billion.
The inflow of capital slowed considerably in the second third of the year, and even reversed, with NIS 970 million leaving the funds. Accumulation resumed in the final third of the year, with NIS 4.1 billion being raised.
The number of mutual funds grew from 648 to 791 in 2004. Meitav noted that the 143 new funds were the largest number ever founded in a single year. The Poalim group founded 30 new funds, the Leumi group twelve, the Discount Bank group eight, Emda - Trust Fund Management four, and eight by First International Bank of Israel (TASE: FTIN1;FTIN5) subsidiary Dikla Company for the Management of Mutual Funds Inc. Private brokers founded 69 new funds.
Published by Globes [online] - www.globes.co.il - on January 31, 2005