The sharp jump since the beginning of the year in stock indices in large parts of the world has done wonders for the long-term savings products, as well as for those for the medium term. According to the forecast of the Meitav investment house, positive returns of more than 1% on average in most of the pension and provident routes will lead some of the entities to present in the first five months of the year high single-digit returns in the equity routes.
However, there are already routes that present double-digit returns, despite the volatility that still characterizes some markets, for example the capital markets in Israel. These are routes that follow stock indices abroad, with almost all savings institutions offering routes that follow the American S&P 500 index, which jumped by about 9% since the beginning of the year.
It was revealed in Globes more than two months ago that with the beginning of the year, the rate of public money transfers to these routes doubled, and in light of the high returns they show, it is difficult to see this trend changing. At Clal’s pension and benefit company, for example, the track that follows the index containing the 500 largest stocks in the US managed to record a return of more than 10% between the months of January and April, and in Meitave and Manora Insurance the return in those four months hovered around 9%.
In May, the S&P 500 index rose another 0.3%, so the positive returns are expected to continue the trend, which allowed many entities to already register a return of 9% or more in the last year, despite the declines that characterized a large part of 2022. Here, the Phoenix fund that tracks the S&P 500 index stands out, achieving a return of 11.64% in the last 12 months.
The large shift abroad is typical not only of the savings products, which include, in addition to the pension funds (which, starting in January, are obliged to offer passive routes with reduced management fees) also the provident and training products, and it is possible to add to them the passive mutual funds, whose market share is increasing.
