Office of the Spokesperson and Economic Information
Press release
The public's financial assets portfolio in the fourth quarter of 2017
- Duringthe fourth quarter of 2017,the value of the public's financial assets portfolio increased by about NIS 58.8 billion (1.7 percent),toabout NIS 3.61trillion at the end ofthe quarter.
- The increase in the portfolio value in the fourth quarterderived from an increase in most components.
- The value of the asset portfolio managed by institutional investorsincreased by about 3.3percent (NIS 50 billion) in the fourth quarter of 2017, to about NIS 1.59 trillion.The increase was a result of an increase in most investment components, particularly shares abroad, government bonds, makam, and cash and deposits.
- In the fourth quarter of the year, there were net deposits in mutual funds totaling about NIS 6.3 billion, further to deposits in previous quarters.
1. The total assets portfolio
In the fourth quarter of 2017, the value of the public’s financial assets portfolio increased by about NIS 58.8 billion (1.7 percent), and for the full year of 2017 by about NIS 168 billion (4.9 percent), to about NIS 3.61 trillion at the end of2017 (Figure 1).
The portfolio increasein the fourth quarter derived mainly from increases in cash and deposits (NIS 20.8 billion, 1.7percent), shares abroad (NIS 16 billion, 5.5 percent), shares traded in Israel (NIS 7.6 billion, 1.5 percent), and corporate bonds (NIS 7.6 billion, 2.1 percent).
The public’s financial assets portfolio relative to GDP increased by 2.5 percentage pointsduring the fourth quarter,to about 285.9 percent at the end of 2017(Figure 2).
This increase was mainly the result of a higher rate of increase in the assets portfolio than the rate of increase of GDP (0.8 percent in current prices).
Asset portfolio composition:From the beginning of 2017, thesewasan increase of about 0.8 percentage points in the share of risk assets, the result of a combination of net investments and an increase in prices. This is contrast to a decline of 0.5 percentage points in the share of foreign currency assets and a decline of 0.3 percentage points in foreign assets. The decline derived mainly from an appreciation of the shekel against the dollar, which decreased the shekel value of those assets, partly offset by increases in prices abroad and in net investments.
2. The securities portfolio, by main components
Shares in Israel
In the fourth quarter of 2017,the balance of shares held in Israel by the public increasedbyabout NIS 7.6 billion (1.5percent), to aboutNIS 513.1 billion at the end of December. The increasewas mostly the result of price increaseson the Tel Aviv Stock Exchange (TASE) in the fourth quarter.
Bonds
In the fourth quarter of 2017, the value of the balance of tradable corporate bonds in Israel increased by about NIS 8billion (2.5 percent), toabout NIS 329.2billion at the end of December, the result of a combination of price increases and net investments.
The balance of government bonds (tradable and nontradable) increased by about NIS 6.2 billion (0.8 percent). The balance of makamwas essentially unchanged.
Cash and deposits
The value of the cash and deposits component increased in the fourth quarter by about NIS 20.8 billion (1.7percent), continuing the upward trend of recent years. Most of the increase during the quarter was a result ofan increase in current accounts and deposits.
The assets portfolio abroad
During the fourth quarter of 2017, the value of the portfolio held abroad by Israelisincreased by about NIS 7.1 billion (1.5 percent) toabout NIS 486 billion at the end of December, which accounts for about 13.5percent of the total asset portfolio:
- The value of shares held abroad increased by about NIS 16 billion (5.5 percent), to about NIS 305.3 billion at the end of the quarter. The increase was a result of a combination of price increases on foreign markets and net investments, which were partly offset by the appreciation of the shekel.
The value of deposits in foreign banks declined during the fourth quarter by about NIS 6.9 billion, mainly as a result of net withdrawals in all segments, to about NIS 4.8 billion at the end of the quarter.- The value of the tradable bonds (corporate and government)portfolio abroad decreased by about NIS 2.1 billion (1.2 percent) to about NIS 175.8 billion at the end of the quarter. The decrease was a result of an appreication of the shekel vis-à-vis the dollar, which reduced the shekel value of the balance. The effect of the appreciation was partly offset by net investments and price increases.
3. The portfolio managed by institutional investors
The value of the asset portfolio managed by institutional investorsincreased in the fourth quarter of 2017by about 3.3percent (NIS 50 billion), to about NIS 1.59 trillion at the end ofthe quarter.The increase was a result of increases in most components, particularly shares abroad (NIS 17.3 billion, 9.1 percent), government bondsand makam(NIS 10.5 billion, 1.6 percent), and cash and deposits (NIS 10.0 billion, 8.8 percent).
The portfolio managed by institutional investorsas a share of the public’s total assets portfolio was essentially unchanged, at about 44percent at the end of December.
Exposure[1] of the portfolio managed by institutional investors to foreign assets and to appreciation of the shekel against foreign currency
- In the fourth quarter of 2017, institutional investors’ rate of exposure to foreign assetsincreasedslightly toabout25.6percent of the portfolio at the end of quarter.The most significant change during the fourth quarter was concentrated at insurance companies, which decreased their exposure to foreign assets by about 0.5 percentage points, to about 34.6 percent. This was in contrast to provident funds, advanced training funds, and the new pension funds, which slightly increased their share of exposure.
- During the fourth quarter of 2017, exposure to foreign currency (including shekel/forex derivatives) increased by about 0.5 percentage points, to about 16 percent at the end of the quarter; the balance ofexposure to foreign currency in shekel terms increased more rapidly than the increase in total investment assets. The increase in the balance of exposure derived mainly from a combination of the increase in the prices of securities in foreign markets, as well as the net flow of investments in assets denominated in and indexed to foreign currency. This increase was partly offset by appreciation of the shekel against the dollar (1.8 percent), which decreased the shekel value of the portfolio.
* The Bank of Israel website has monthly long-term tables of data on institutional investors’ exposure to foreign currency and to foreign assets.
4. The portfolio managed by mutual funds
The value of the portfolio managed by Israeli mutual funds was about NIS 243 billion at the end ofthe fourth quarter of 2017, about 6.7percent of the public's total asset portfolio.
In the fourth quarter of 2017, there were net deposits(surplus of deposits over redemptions, net of dividends), totalingabout NIS6.3 billion, further to net deposits of NIS 13.2 billion in the three previous quarters. The net deposits, combined with the increase in asset prices, led to an increase of about NIS 9.6 billion in the value of mutual fund balances.
A breakdown of mutual funds by specialization indicates that in the fourth quarter, similar to the previous quarters of the year, net deposits were concentrated in domestic general bond funds in Israel (NIS 4.2 billion, 4.7 percent). There were also net deposits in funds specializing in government bonds (NIS 1.5 billion, 5.1 percent) and in shares abroad (NIS 1.1 billion, 8.5 percent). In contrast, there were net withdrawals from unindexed money market funds (NIS 1.3 billion, 8.7 percent) and from funds specializing inunindexed bonds in Israel (NIS 1.0 billion, 5.4 percent).
Further information and details on this subject are available at the following link:
Bank of Israel - The public's financial assets portfolio in the fourth quarter of 2017 Page1 Of6
[1]Estimates of members’ exposure (rather than exposure of the institutional investors themselves) to various risks in the portfolio managed for them by the institutional investors (excluding insurance policies with a guaranteed yield, where the risk is taken on by the institutional investors).