The track leading for two consecutive months despite market declines: What happened to your savings in July?
Equity and general investment tracks ended the month with negative returns of 0.9% and 0.5% due to market volatility. Despite declines in the US, the S&P 500 track recorded a positive return of 2.4% thanks to the strengthening of the shekel.
Market volatility in the past month has impacted the performance of medium-to-long-term savings. According to the Meitav investment house, general and equity tracks in provident and advanced study funds are ending a second consecutive month with negative returns. Conversely, despite declines on Wall Street, the S&P 500 track was the only one to generate a positive return for the second month in a row.
According to a review by Avi Berkowitz, Deputy Chief Investment Officer at Meitav Gemel and Pension:
"In July, there were price declines in global stock markets (USA and Japan), and price declines in government bonds in Israel, which are responsible for the negative return of the funds. On the other hand, the weakening of the shekel mitigated the negative return."
According to Meitav's assessment, general provident funds and advanced study funds showed an average negative return of 0.5% in July, while equity tracks showed a sharper decline of 0.9%. Conversely, the track following the flagship American index, the S&P 500, is expected to show a positive return of about 2.4%.
For the S&P 500 track, this is the second consecutive month of positive performance while other tracks declined. Thus, despite a decline of about 0.8% in the American index, a strengthening of about 3.2% in the value of the shekel against the dollar led the track to record a positive return contrary to industry trends.
Against this background, the Israeli stock market concluded a mixed month: the TA 35 index rose by 0.7%, the TA 125 rose by 0.3%, while the TA 90 fell by 0.8%. In contrast, the USA saw price declines: the Dow Jones fell by 0.2%, the S&P 500 fell by 0.8%, and the Nasdaq fell by 4.2%. However, in shekel terms, the indices' returns are about 3.2% higher.
The recent strengthening in the S&P 500 track follows a long period of underperformance compared to equity and general tracks, driven by the significant strengthening of the shekel. Since the beginning of the year, equity and general tracks showed positive returns of 8.8% and 5.4% respectively, compared to 4.9% in the S&P 500 track.
Since the beginning of the year, global stock markets have shown price increases. In the Israeli market, the TA 35 index rose by 12.8%, the TA 125 by 9.8%, and the TA 90 fell by 0.6%. In the USA, the Dow Jones and S&P 500 indices rose by 8.6% each, while the Nasdaq rose by 8.1%. However, the weakening of the dollar against the shekel subtracted about 3.7% from these returns in shekel terms.
