Mutual funds erase most of NIS 2.6 billion February deposits in one week

Investment bank Meitav, which specializes in mutual fund data, estimates that following the 0.6% hike in interest rates at the end of February, mutual fund redemptions grew to some NIS 2.5 billion last week, erasing February deposits.

Meitav's economists estimate that redemptions were largely in shekel funds, due to negative yield on the unindexed, fixed-interest Shahar bonds, and in mixed and flexible funds that had raised billions of shekels in the preceding two months.

Meitav did not provide precise redemption figures. The economists said that some NIS 2.6 billion was injected into mutual funds in February, and that 0.8% negative yield across all funds resulted in assets eroding by some NIS 600 million.

Assets in February grew by 2.6%, from NIS 76.14 billion in the beginning of the month, to NIS 78.13 billion at the end of the month. The more prominent industry sectors were government and corporate bond funds. Some NIS 3.2 billion was injected into these funds. Some NIS 700 million was injected into funds specializing in investments overseas. About NIS 300 million was injected into mutual funds specializing in foreign currency locally.

Redemptions in shekel mutual funds came to some NIS 1.4 billion in February. Redemptions in stock-denominated funds came to NIS 168 million, and about NIS 55 million was redeemed in flexible and mixed mutual funds.

Meitav said that over January and February assets of mutual funds sharply rose by 23.4%, from some NIS 63.3 billion to about NIS 78.13 billion as a result of an unprecedented injection of about NIS 14.9 billion, of which NIS about 12.5 billion was injected into bond funds.

Some NIS 2.4 billion was injected into mutual funds specializing in investments overseas over the first two months of the year. Some NIS 930 million was injected into funds investing in foreign currency locally.

The Hapoalim group's market segment dropped in February to 37.2% from 37.7%, while Leumi group increased from 29.6% to 30.1%, and the Discount group increased its segment from 12.1% to 12.3%, the economists reported.

Bank Hapoalim lost some 1.8% market segment over the first two months of the year, while Bank Leumi increased its market segment from 29% to 30.1%, and Bank Discount increased its segment to from 10.9% to 12.3%.