2024 was the best year for savings in Israel since 2021 and the second best year over the past decade. Investors in pension, provident and advanced training funds enjoyed particularly strong returns, despite the war and its negative impact on the Israeli economy.
Avi Berkovich, deputy chief investment officer at Meitav Dash Provident and Pension Funds, estimates that the average return on the advanced training funds track over the year was 13.2%, triple the average over the past decade.
Savings invested in stocks enjoyed even higher returns both in Israel and the US, where the S&P 500 rose 24.9% in 2024 despite the falls on Wall Street in December. In Israel the Tel Aviv 25 Index and the Tel Aviv 125 Index both rose 28% last year. As in 2021, Israel's markets enjoyed 11 positive months with only one month (April) negative for savings.
Pension funds also had a positive year, with savings in higher risk tracks for younger people up to the age of 50 enjoying an annual return of 15.2%, while tracks for those aged 50 to 60 saw 13.3% returns, and tracks for those over 60 had 10.3% returns.
Berkovich said, "Taking increased risk in 2024 paid off and this is evident in the range of returns achieved in the pension tracks. The higher the proportion of shares (for those aged up to 50), the higher the return."
He further notes that "this year saw strong price increases in the stock markets in Israel and abroad, increases in corporate bonds and, to a lesser extent, in government bonds in Israel, and all of these created a very good return for investors." He observes that the market gains occurred despite the continuation of the war in Ukraine, for the third year in a row, and the war in Israel, as well as unexpected events like the fall of the Assad regime in Syria, the collapse of the French government, and the weakening of the coalition in Germany. The main reasons for the strong gains in the markets in 2024 were the beginning of the trend of cutting interest rates in the US and the election of Donald Trump as US president.
In December, the Tel Aviv Stock Exchange (TASE) performed particularly strongly with an rise of almost 6% in the Tel Aviv 35 index, which led to a positive overall return, despite the declines on Wall Street. The average return on the general provident fund track in the past month is expected to stand at 0.9%, with the stock track expected to show a similar increase of 0.8%. In contrast, the S&P 500 index fell 2.5% last month.
Published by Globes, Israel business news - en.globes.co.il - on January 2, 2025
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