"The weight of Israeli institutional investors' overseas investments will reach 15-20% in a matter of a few years, as opposed to the current situation where they do not utilize their existing ceiling. Provident and advanced training funds invested just 1.2% of assets abroad in 2001, despite a limit of 5%. Pension funds didn't invest abroad at all, while life insurance plans invested nearly nothing overseas," estimate Dr. Gil Bufman, Chief Economist of Bank Leumi and Oren Levintal of the bank's Economic Sector.
The economists note that the rate of foreign assets held y the Israeli public has risen impressively in the past decade from a negligible 0.5% of the total public portfolio to 8.5% during 2000. At the end of January 2002, total foreign assets held amounted to NIS 81 billion. Of those assets, 5.8% are held via mutual funds, 1.8% are held via provident funds, and 0.7% are held via advanced training funds. The remaining 92% are held directly by the Israeli public.
Bank Leumi mentions, that as part of the December 2001 "package deal", the limitations on institutional investors overseas investments were lifted in two stages. In the first stage, the ceiling was lifted from 5% to 20% of their total portfolios. The limitations are expected to be lifted entirely by the end of this year.