Israeli Pension Funds Saw Flat Returns in September Amid Market Volatility

Israeli pension funds and provident funds are estimated to have experienced a nominal average return of -0.1% in September, according to an assessment by Meitav Provident Funds and Pensions. The overall range of returns for these funds is expected to be between a positive 0.2% and a negative 0.4%.

The negative performance is attributed to sharp declines in U.S. government bonds and drops in Israeli government and corporate bonds. Globally, most stock markets saw price decreases, contributing to the overall negative returns for general pension funds. However, a 2.5% depreciation of the shekel against the U.S. dollar provided a boost of approximately 0.5% to returns.

Domestically, the Tel Aviv stock market showed mixed results. The TA-35 index rose 1.6%, the TA-125 gained 0.5%, the TA-90 index fell 2.7%, and the TA-60 remained unchanged. In contrast, global stock markets largely experienced declines. The Dow Jones fell 4.3%, the S&P 500 dropped 0.5%, while the Nasdaq saw a 1.9% increase. European markets also saw decreases, with the German DAX down 4.0%, the French CAC down 4.4%, and the Eurostoxx 50 down 2.4%. The Nikkei in Japan rose 0.7%, and the global emerging markets index fell 1.0%.

In the Israeli corporate bond market, the Tel Bond 20 index decreased by 0.2%, the Tel Bond 40 was unchanged, and the Tel Bond 60 fell 0.1%. The general corporate bond index dropped 0.1%. Government bonds saw a 0.6% decline, with index-linked bonds down 0.4% and shekel bonds down 0.9%. Floating-rate bonds, however, rose 0.3%.

Separately, the article notes that in a different period, global stock markets experienced gains. U.S. markets were positive, with the Dow up 5.9%, the S&P 500 up 11.8%, and the Nasdaq up 15.6%. The weakening dollar against the shekel reduced these returns by about 0.7% in shekel terms. European markets were mixed, with the German DAX up 2.9%, the French CAC down 2.3%, and the Eurostoxx 50 up 8.2%. The weakening euro against the shekel reduced these returns by about 0.15% in shekel terms. Japan's Nikkei rose significantly by 32.6%, and the global emerging markets index rose 21.2%. In Israel, the TA-35 index rose 15.8%, the TA-125 rose 11.2%, and the TA-60 rose 5.0%, while the TA-90 fell 3.1%. Corporate bonds rose 3.1%, and government bonds rose 1.9%.