Savings Policies Show Mixed September Results; Altshuler, Ayalon Lag

September proved to be a mixed month for Israeli savers, with general investment tracks in savings policies showing almost no change and stock-based tracks gaining an average of approximately 0.6%. The Tel Aviv 35 index rose 1.6% and the TA 125 added about 0.5%, while the TA 90 fell 2.7%. In the US, the Nasdaq Composite increased by 1.9%, and the S&P 500 decreased by 0.5%. The Israeli shekel's depreciation of about 2.5% against the dollar significantly boosted the value of foreign investments for Israeli savers, offsetting losses in the bond market. Bond yields rose in both Israel and the US, leading to a decrease in bond prices, which particularly affected general tracks holding a substantial portion of bonds.

In the general track, which manages the majority of funds in savings policies, Hachshara Mitav led in September with a 0.35% return. Hachshara Hachshara followed with 0.33%, and Hachshara Mor with 0.32%. At the bottom of the general track were Ayalon with a -0.10% return, Yelin Lapidot with -0.23%, and Altshuler Shacham with -0.42%, the latter being impacted by its exposure to long-term bonds.

For the year to date, Clal Insurance leads the general track with an 8.3% return, followed by Menora and Ayalon at 7.6% each, compared to an average of 6.8%. Over the past 12 months, Clal also leads with 13%, Ayalon is second with 12.4%, and Menora third with 12%, against an average of 10.5%. Ayalon demonstrates strong long-term performance, leading over three years with 46.6% despite its September dip.

In stock-based tracks, Hachshara Hachshara and Hachshara Mitav shared the top spot in September with 1.14% each, followed by Harel with 1.04% and Analyst with 0.94%. Yelin Lapidot was at the bottom with 0.16%, Altshuler Shacham with 0.14%, and Ayalon with 0.09%. Clal Insurance also dominates the long-term view in stock tracks, with 14.6% year-to-date and 22.7% over the last 12 months. Ayalon leads over three years with 79.1% in stock tracks.

Savings policies, also known as financial policies, are investment vehicles managed by insurance companies without an insurance component. Funds can be deposited without an annual limit and withdrawn at any time, with tax deferred until withdrawal. A key advantage is the ability to switch between investment tracks without triggering immediate tax events. However, management fees can be as high as 2% of the accumulated sum, compared to a 1.05% cap for investment provident funds. Management fees in savings policies cannot be unilaterally changed by the company, and larger accumulations may allow for negotiation.