Israeli Pension Funds Face Losses in Volatile October Market
Translated & summarized from Ice by baba
Israeli provident and pension funds are expected to report negative returns for October, with the general track down 0.4% and the stock track down 1.1%. The S&P 500 index-tracking fund is a notable exception, projected to gain 2.6%. Despite the monthly losses, year-to-date returns remain positive, with the general track up 6.4% and the stock track up 10.6%. Market volatility, particularly in local stocks and corporate bonds, significantly impacted October's performance.
The story in 5 lines · by baba
- Israeli provident funds and pension funds are projected to end October with average negative returns.
- The S&P 500 index-tracking fund is expected to be the only track showing a positive return in October.
- Pension funds showed varied losses by age group, with younger savers' funds experiencing greater declines.
- Despite October's losses, year-to-date returns for provident funds remain positive.
- Market volatility, especially in local stocks and corporate bonds, drove October's negative performance.
Israeli provident funds and study funds are projected to end October with an average negative return of 0.4% in their general track and 1.1% in their stock track, according to a forecast by Meitav Investment House. The general track's returns are expected to range from a 0.7% loss to a 0.1% gain, while the stock track is anticipated to see losses between 0.6% and 1.6%. These are nominal gross return estimates, not final figures.
The only exception among the analyzed tracks is the S&P 500 index-tracking fund, which is expected to yield a positive 2.6% in shekel terms, with a narrow range of 2.5% to 2.7%. This track is predicted to be the sole one showing an average positive return.
Pension funds also experienced negative returns, though to a lesser extent and with variations across age groups. The track for individuals aged 50 and under is expected to have an average negative return of 0.6%, those aged 50 to 60 are predicted to lose 0.4%, and individuals over 60 are expected to see a more moderate decline of 0.1%. These differences are attributed to varying exposure levels to risky assets, with younger savers' tracks generally holding higher stock allocations and thus being more sensitive to market fluctuations.
Despite the negative October performance, the year-to-date picture remains positive. Meitav's forecast indicates that provident funds in the general track achieved a cumulative return of 6.4% in the first ten months of 2026, while the stock track yielded 10.6%.
Avi Berkovitz, Deputy Head of Investments at Meitav Pension and Provident Funds, stated that October was characterized by high volatility in both Israeli and global financial markets. He noted that the month's final results were determined in the last two days, reversing an earlier trend of positive returns to negative ones. The primary factors impacting returns were declines in the Israeli stock market and local corporate bonds, a combination that particularly affected the general track funds due to their diversified portfolios.
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