The stock exchanges are collapsing: this is the study fund that yielded the highest return Israel today

The sharp declines in stock exchanges in Israel and around the world also significantly affect the public's savings.

As of April 2022, NIS 314 billion is managed in the study funds, and these are the most "exposed" funds for withdrawals.

From past experience, at such times a significant portion of the public may panic which may lead them to withdraw the funds from the study fund and actually “determine” the loss.

The most common investment route is the general route, in which about 75% of the funds are managed.

How has the crisis in the capital market affected our study funds?

Despite the sharp declines in the markets, an in-depth examination of the ten largest study funds in the general track reveals relatively reassuring data - a decrease of 2.66% on average since the beginning of the year.

From the beginning of the year: a negative return on all study funds,

The importance of the study fund

It can be seen from the table that all the study funds have recorded a negative return since the beginning of the year, and the Altshuler study fund, which fell by 4.6%, stood out.

Also on an annual basis, Altshuler achieved a negative return of about 0.1%, while the analyst's coffers showed the highest return in the last 12 months, which stood at about 6.6%.

Immediately after it are Migdal and Harel with 6.2% and 6.1% respectively.

Industry sources explained to us that the reasons for Altshuler's negative returns were a bias in growth stocks and China, and a relatively low holding in Israeli stocks.

We enlisted the help of Eyal Siani, VP of Insurance and Finance Quality and a member of the Finance Committee at the Bureau of Insurance Agents, to answer some important questions on the subject.

I'm not happy with the returns of the company I'm in.

Is it possible to move to another company?

Yes.

You can transfer to any other management company, either by contacting the company you would like to transfer to directly or through a pension license holder.

It is recommended to consult a professional before making a decision on the subject, in order to examine the suitability of the management company and the investment route for personal needs, the desired level of risk and the range of investment.

What have been the returns on study funds in the general track in recent years?

In the last 23 years (2021-1999), the average annual return of study funds was positive and stood at 7.07%.

Only in 4 years out of the 23 there were negative returns of 6.29%.

The encouraging statistic is that in each year following a year in which there was a negative return, there was a high positive return of 17.36% on average.

Eyal Sinai, VP of Insurance and Finance Quality, Photo: No Credit

Is there a special advantage in keeping the savings in a study fund?

A study fund is the only savings product that grants an exemption from capital gains tax - an exemption from paying a tax of 25% on the real profits accrued up to a ceiling set by law.

The value of this special exemption may reach tens of thousands of shekels over the years, so if we need money in the near term, it is worth examining whether there is another channel from which we can withdraw funds.

The larger the annual return and / or the savings period, the higher the exemption value.

If I need money - is it possible to get a loan from the study fund?

Yes.

The repayment terms and interest rates from the study fund are considered very attractive in relation to other alternatives that exist today (such as banks, non-bank loans, etc.).

I am in the general track - is it possible to switch to another investment track?

Yes.

The study funds have a variety of investment paths with different characteristics and different risk levels.

You can request to switch to another investment route, and the funds will be transferred within three business days.

This can be done by contacting the management company directly or through the personal area on the site.

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