Israelis Running From Mutual Funds

Following a pattern seen in markets all over the world, Israeli mutual fund investors are running for the doors.  Skittish Israeli investors are expected to have withdrawn over 5 billion NIS from Israeli mutual fund companies just in the month of October.  Investors have withdrawn $6.47 billion in the U.S. just this past week alone.

I’m having trouble locating the overall size of the Israeli mutual fund industry from an assets under management (AUM) perspective, but given its relative size, I have a feeling that this a relatively big number.  The same Globes article linked to above said that withdrawals were even higher in January of this year, probably after clients received their yearly statements for 2007.

Israeli investors are finicky and like many investors globally, tend to follow the hot money.  There is less of a buy-and-hold culture here in a country of investors who would rather find a better producing asset (typically, real estate) than wait as we sort out the mess of the market.

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