NIS 480M withdrawn from monetary funds
Meitav economists say shekel funds posted record weekly inflows of NIS 190 million, share fund market stake shrunk from about 9% in March to only 6.4%
The reason for the withdrawals, the economists say, is skepticism among investors insofar as high risk investments such as corporate bonds and stock, which led to outflows from government or corporate bond funds and from money market funds and investors prefer to entrench themselves in short-term shekel bond funds.
In a weekly overview, according to Meitav economists, the shekel fund (Israeli, foreign and mixed) recorded additional weekly withdrawals of NIS 55 million ($14.5 million). Corporate bond funds had NIS 310 million ($81 million) pulled out over the past week.
Since the beginning of the month withdrawals from these funds amounted to some NIS 650 million ($170 million) and since the onslaught of the withdrawal wave in early March, investors have pulled out a total of NIS 20 billion ($5 billion).
Meitav further notes that the share-fund market stake was slashed by about 9% since the beginning of March to only 6.4% today on the backdrop of high withdrawals that broke through the NIS 3 billion ($790 million) threshold and an additional NIS 2.4 billion ($630 million) fall in the value of the fund's assets.
Nonetheless, the Tel-Bond 20 Index dropped in the parallel period from March until today, a relatively moderate 1.2%, the government/corporate bond index dropped by 4% and the general bond index even climbed 1.1%.
At the same time, government/corporate bond funds with exposure to the stock market recorded an average 6.5% decline in the period which is not too steep in light of the current crisis and their average 17% decline in 2008. It appears that the huge withdrawals were beyond all proportion, explain Meitav's economists.
After a first week of inflows after a pause of almost a year, the government/corporate bond funds and the index-linked funds recorded moderate inflows of some NIS 215 million ($55 million) – the second consecutive week of inflows.
The money market funds, according to Meitav, ended another glum week with NIS 480 million ($126 million) in withdrawals – the highest weekly withdrawal since the beginning of the year.
Since mid October, when most money market fund investment houses had already announced the expiration of the zero-management fee policy, some NIS 2 billion ($530 million) was pulled out of money market funds.
On the other hand, shekel funds were able to take in part of the withdrawn funds after a pleasing weekly inflow if NIS 190 million ($50 million). Shekel funds, namely STB funds, exhibited a reverse trend to money market funds posting high inflows in NIS 1.1 billion ($290 million) since mid October.
The Israeli fund market manages some NIS 144.5 billion ($380 million) in funds as of December 15, 2011. Traditional funds (with the exclusion of money market funds), manage some NIS 109 billion ($28 billion).
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