2007 was a stormy year for all investment instruments. The markets were challenging, competition on returns intensified, and investment instruments threatened each other. The mutual funds industry faced additional challenges: exchange traded funds (ETFs) entered the bond market, the bread and butter of mutual funds; and the industry faced massive withdrawals, especially during the second half of the year.
For most mutual fund managers, 2007 was a mediocre year, but a "Globes" analysis (in a special "MoneyTime" section) of several parameters ranked Psagot Ofek Investment House Ltd. at top. For Psagot, it was a great year. The company's mutual funds raised more NIS 5 billion, consolidating the company's position as the number one mutual fund manager, despite the market storms and mutual fund industry's shaky year.
The provident funds' five-year rankings, ranked by investment returns, showed little change. The 2007 rankings were as follows: Prisma Investment House Ltd. took the number one position from Analyst IMS Investment Management Services Ltd. (TASE:ANLT), with Excellence Investments Ltd. (TASE: EXCE), DS Securities & Investments Ltd. (TASE:DSIN), and Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) - the latter three in same order as in 2006.
All this means is that in the long-term, quality counts and shooting stars are transient. There is no reason to be excited if a particular fund manager has a great year in terms of return on investment, especially if this was its first year of operation. On this parameter, the 2007 rankings were as follows: the provident funds of Altshuler Shaham Ltd., Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), and Bank Hapoalim (TASE: POLI; LSE:80OA).
Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) had the best returns on its participating life insurance policies - 11.01% in 2007; and an annual of average return of 11.4% in 2005-07. It ranked third in the five-year average return, with 12.5%. Harel was number one in the five-year annual average return, with 13%, and ranked second in the three-year annual average return, with 10.9%.
Published by Globes [online], Israel business news - www.globes-online.com - on January 30, 2008
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