Menora Mivtachim Leads August Savings Returns as Clal Insurance Dominates Annual Table

August proved to be a positive month for savers holding investment-linked life insurance policies across all asset classes. On the Tel Aviv Stock Exchange, a moderately positive trend was recorded: the TA-35 index rose by 1.1%, the TA-125 added 0.9%, and the TA-90 ticked up by 0.2%. The primary performance driver came from overseas, where the S&P 500 climbed 3.3%, the Nasdaq jumped 5%, and the Dow Jones added 1.9%. However, a 2.3% strengthening of the Israeli shekel against the US dollar offset a substantial portion of the shekel-denominated returns from foreign investments. The local bond market also contributed to monthly gains, with both the general government and corporate bond indices rising by approximately 0.4%.

General Track: Menora Mivtachim Takes the Lead

In the general track, which manages the vast majority of public savings, August ended with an average return of 1.03%. Menora Mivtachim finished first with a return of 1.38%, while Clal Insurance and Hachshara – Altshuler Shaham shared second place, each delivering 1.36%. All three comfortably outperformed the industry average.

Since the beginning of 2026, Clal Insurance has led the market with an 8% return, followed by Ayalon at 7.6% and Menora Mivtachim at 7.3%, compared to an industry average of 6.65%. Over the trailing 12 months, Clal Insurance also ranks first with a 15% return, Ayalon is second with 14.8%, and Menora Mivtachim is third with 14.5%, against a market average of 12.6%.

Notably, Ayalon finished August at the bottom of the monthly table but still holds second place both year-to-date and over the past 12 months. A likely explanation for its monthly underperformance is its high exposure to mid-cap equities in the local market; August's gains in Tel Aviv were concentrated in large-cap stocks, while the TA-90 remained virtually flat and the Yeter index fell by 2.9%. In previous months, Clal Insurance's strong performance was largely attributed to its overweight position in the domestic market.

Equity Track: Altshuler Shaham Bounces Back

Equity tracks, which maintain at least 75% exposure to stock markets at all times, posted an average gain of 1.8% in August. Hachshara – Altshuler Shaham led the category with a 2.5% return, driven by its high exposure to foreign markets, particularly the US technology sector. Menora Mivtachim followed with 2.25%, and Clal Insurance recorded 2.2%.

Over longer horizons, Clal Insurance's outperformance is even more pronounced in the equity track than in the general track. Year-to-date, it leads with a 14% return, followed by Harel Insurance at 12.2% and Ayalon at 12.1%, compared to a 10.6% average. Over the past 12 months, Clal Insurance delivered 26.7%, Ayalon posted 24.4%, and Harel Insurance achieved 24.2%, against a track average of 21.1%.

The S&P 500 Tracker Lesson

While the S&P 500 index rose by 3.3% in dollar terms in August, the shekel's 2.3% appreciation against the dollar eroded most of those gains, leaving S&P 500 tracking portfolios with an average return of just 1%.

The performance gap widened significantly over longer periods: year-to-date, tracking portfolios returned 5.7% compared to 10.70% for active equity tracks. Over the past 12 months, passive trackers yielded just 7.9% compared to 21.2% for active equity portfolios.

Understanding Investment-Linked Policies

An investment-linked policy (also known as a financial policy) is a savings vehicle managed by insurance companies. Despite the name, it contains no insurance components.

Key Advantages:

• Savers can deposit any amount without annual caps and withdraw funds at any time.

• Switching between investment tracks does not trigger a tax event; capital gains tax is deferred until actual withdrawal.

• Between 5% and 30% of assets in the general track are invested in non-tradable assets (such as infrastructure and non-bank credit), offering genuine diversification.

• Policyholders can secure loans against their savings at competitive interest rates, often at or below the Prime rate.

Key Disadvantages:

• Management fees remain the primary drawback, reaching up to 2% of accumulated assets, with some policies also charging fees on ongoing deposits. In comparison, investment provident funds (Kupat Gemel Le-Hasgaha) cap management fees at 1.05% of assets.

• The product is offered by a limited number of insurance companies, keeping fees relatively high and rigid. However, these fees cannot be raised unilaterally by the insurer and are negotiable; larger account balances provide savers with stronger bargaining power.