Aylon Insurance Faces Another Month of Disappointing Returns in Provident Funds
Aylon Insurance faces a disappointing second month in the provident fund sector with low September returns, despite aggressive marketing and massive capital inflows driven by insurance agents.
Aylon Insurance, the new player in the provident fund sector aiming to attract mass investors, is facing a disappointing start. According to data obtained by Globes, the company is expected to post uninspiring returns for September.
September Returns and Market Positioning
In the general track of its advanced training funds (hishtalmut), Aylon is projected to post a slight negative return of -0.1%, aligning with the market average and placing it in the middle of the ranking table. Meanwhile, in the equity track, it is expected to post a modest positive return of about 0.25%, likely positioning it at the lower end of the yield table.
This marks Aylon's second month in the industry and its second consecutive month of subpar yields, following August, when its returns were among the lowest in the sector. Similar trends were observed in Aylon's savings policies, managed by the same investment team, which saw a 0.1% decline in the general track and a 0.9% positive return in the equity track in September.
"This is an agency-driven company," a senior competitor told Globes. "They have a good team, like investment manager Tamir Hershkowitz, and they are small, so there is a buzz around them."
Reasons for Underperformance and Aggressive Marketing
Industry experts note that provident fund yields must be evaluated over long horizons, and two months is a very brief period. Aylon's relative lag stems from its investment positions. Aylon is more heavily exposed to Israel compared to competitors, while the local market has underperformed relative to foreign markets over the past two months, particularly the Tel Aviv 90 Index, which dropped by nearly 3% last month.
Additionally, Aylon holds a larger position in marketable bonds, both domestically and abroad, than its competitors, making it vulnerable to the sharp rise in US bond yields above 5%. Aylon now hopes that bond yields will soon decline and that its chosen sectors in Israel will outperform foreign markets.
Despite these mixed investment results, Aylon is successfully executing aggressive marketing through insurance agents. The company manages approximately 2.6 billion NIS in this sector, having raised about 1.4 billion to 1.5 billion NIS in September alone—accelerating past August's figures thanks to enthusiastic promotion by insurance agents.
Meanwhile, Globes has learned that Altshuler Shaham Finance also struggled in August, expected to finish near the bottom of the yield table despite Wall Street's strong performance. The underperformance is likely attributed to bond exposure amid rising yields, even though its equity component delivered solid results.
