Public's financial assets portfolio declined by NIS 5 billion in the Q4

In the fourth quarter of 2018, the balance of the public's financial assets portfolio declined by NIS 5 billion to a level of NIS 3.7 trillion. The share of the public's financial assets portfolio relative to GDP declined by 3.8 percentage points, and stood at 278.4% at the end of the quarter.
The balance of investments abroad decreased during the quarter by NIS 27 billion (-5.1%), and amounted to NIS 530 billion at the end of the quarter, which constitutes 14% of the total assets portfolio:
• The balance of shares abroad decreased by some NIS 27.8 billion (7.8%), and stood at some NIS 311 billion at the end of the quarter, due to the combination of price declines in foreign stock markets, which were partially offset by net investments (NIS 5.5 billion) and a devaluation of the shekel against the dollar (3.3%), which raised the shekel value of the portfolio.
During the fourth quarter, the balances of most of the components in the portfolio declined, excluding the balance of cash and deposits and shares in Israel. The decrease in the balance of public holdings in assets abroad and in corporate and government bonds was notable.
• The balance of holdings in shares in Israel increased by NIS 15 billion (3%), due to net investments partially offset by price declines on the Tel Aviv Stock Exchange, mainly in December.
• The balance of bonds of tradable companies in Israel decreased by NIS 7.5 billion (-2.2%) and stood at NIS 336 billion at the end of the quarter, as a result of net investments that were offset, and even more, by the fall in prices.
• The balance of government bonds (tradable and non-tradable) and Treasury bills decreased by NIS 4.1 billion (-0.5%).
The balance of investments abroad decreased during the quarter by NIS 27 billion (-5.1 percent), and amounted to NIS 530 billion, or 14 percent of the total assets portfolio.
The balance of the portfolio managed by institutional investors fell by some NIS 41.6 billion (2.5%) in the fourth quarter of 2018 to some 1.64 trillion (44.2% of the total portfolio of the public's financial assets.) The decline in the balance of the portfolio was due to a decline in all instruments held by the public (NIS 17.7 billion, 2.6%), shares in Israel (NIS 10.7 billion, 7.5%), and investments abroad (NIS 5.4 billion, 1.5%).
The volume of the portfolio managed by mutual funds (excluding basket funds) in Israel fell by NIS 23.6 billion (10 percent) in the fourth quarter of the year, to NIS 219.9 billion, or 6 percent of the public's asset portfolio.
The decrease in the fourth quarter was mainly a result of price declines, alongside net redemptions (surplus deposits on deposits less dividend) of NIS 9.3 billion, following net redemptions in the second and third quarters of the year (Figure 7).
The distribution of funds by specialization indicates that in the fourth quarter most of the specialization was characterized by net redemptions. The funds specialized in bonds that recorded redemptions of NIS 11 billion were prominent, mainly in respect of bonds in general - NIS 7.3 billion, while deposits of NIS 2.3 billion were recorded in the shekel-denominated specialization group.