Israeli Pension Funds Show Mixed September Returns Amid Market Volatility
Translated & summarized from Walla by baba
Israeli pension funds experienced an average negative return of 0.01% in September amid global market volatility driven by election uncertainty and rising yields. Clal and Migdal funds led the general track, while Altshuler Shaham lagged. Harel's fund topped the equity track, with Yelin Lapidot's fund showing a loss. Analysts predict continued market challenges due to election uncertainty and global economic factors, suggesting increased diversification and bond allocation.
The story in 5 lines · by baba
- Israeli pension funds averaged a 0.01% negative return in September amidst market volatility.
- Clal and Migdal funds led the general track, while Altshuler Shaham was at the bottom.
- Harel's fund led the equity track with a 0.85% return, while Yelin Lapidot's fund lost 0.08%.
- Global markets saw mixed results, with US tech stocks and the Nasdaq leading gains.
- Election uncertainty in Israel and rising global bond yields are expected to challenge markets further.
Global stock markets experienced significant fluctuations in September due to election uncertainty in Israel, energy price pressures, and rising yields, impacting investment portfolios. In Tel Aviv, the TA35 index rose 1.58%, the TA125 gained 0.68%, while the TA90 fell 2.73%. US markets, led by technology stocks, saw the Nasdaq increase by approximately 3.9% and the S&P 500 by about 2.6%.
The ten largest Israeli pension funds, examined in their general track, posted an average negative return of 0.01% in September, despite 60% of them achieving positive returns for their members. Clal and Migdal insurance companies led this track with a 0.17% return, with Clal also leading year-to-date at 8.60% compared to Migdal's 7.13%. Altshuler Shaham's pension fund was at the bottom with a negative return of 0.31%.
In the equity track, the average return was 0.43%, with Harel Insurance Company's fund leading at 0.85% for September. Yelin Lapidot's fund was the sole negative performer in this track, with a 0.08% loss.
Nir Ovadia, Senior Deputy Director at Clal Insurance, attributed September's positive returns to strong performance in global tech stocks, particularly on the Nasdaq, and gains in TA35 index stocks, alongside a significant rise in the TA Insurance index. He noted that negative influences came from rising energy prices, especially in Europe, and increasing bond yields.
Ovadia explained that portfolio performance differences stem from geographic diversification, sector allocation, and the contribution of illiquid assets. Looking ahead, he anticipates a challenging October due to ongoing Israeli election uncertainty, rising global bond yields, and shifts in the tech sector. He suggested that diversification and an increased allocation to bonds might become more attractive. Ovadia concluded that a decisive election outcome, regardless of the specific result, would be positive for the markets, provided the incoming government's policies are perceived as manageable by investors.
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