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BANK OF ISRAEL
Office of the Spokesperson and Economic Information
August 19, 2014
Press Release
The public's financial assets portfolio in the second quarter of 2014
 During the second quarter of 2014 the value of the public's financial assets portfolio
increased by about NIS 30 billion, an increase of about 0.5 percent in real terms, and
reached about NIS 3.05 trillion at the end of June.
 The growth during the quarter derived mainly from an increase in the balance of
government bonds and makam (about NIS 34 billion, 4.5 percent) and in the tradable
portfolio abroad (NIS 11.7 billion, 3 percent), mainly due to a net inflow of investments by
institutional investors. The increase was partially offset by a decline in share prices on the
Tel Aviv Stock Exchange and by a strengthening of the shekel vis-à-vis the dollar.
 As a result of the above developments, the share of tradable assets in the portfolio increased
by 0.9 percentage points during the second quarter, and by 0.7 percentage points in the
share of foreign assets.
 There was a net accumulation of about NIS 11.8 billion (4.8 percent) in the section of the
portfolio managed through mutual funds during the second quarter, mainly in mutual
funds specializing in CPI-indexed corporate bonds. Preliminary data for July indicate net
redemptions in these funds.
1. The total assets portfolio
During the second quarter of 2014, the value of the public’s financial assets portfolio increased by
about NIS 30 billion, an increase of about 0.5 percent in real terms, and reached about NIS 3.05
trillion at the end of March.
The increase in the second quarter was due primarily to an increase in the balance of government
bonds and makam by about NIS 34 billion (4.5 percent). In addition, there was an increase of about
NIS 10 billion (2.6 percent) in the value of the tradable assets portfolio abroad. This increase was
partially offset by price declines on the Tel Aviv Stock Exchange and by the strengthening of the
shekel by 1.4 percent vis-à-vis the dollar.
Since the middle of 2013, the pace of growth in the value of the public’s assets portfolio has
exceeded the pace of GDP growth, contrary to the trend in 2011–2012, mainly due to price
developments on stock markets in Israel and abroad. At the end of June 2014, the public’s financial
assets portfolio was worth about 290% of GDP.
Bank of Israel – Public's Assets Q2-2014
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Bank of Israel – Public's Assets Q2-2014
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As a result of the growth in the value of the public’s securities portfolio abroad, in the second quarter
of 2014 there was an increase of about 0.9 percentage points in the share of tradable assets in Israel
and abroad, and 0.7 percentage points in the share of foreign assets.
2. The securities portfolio, by main components
Shares in Israel
During the second quarter of 2014, the balance of shares held in Tel Aviv by the public declined by
about NIS 8.4 billion (1.6 percent), to about NIS 504 billion at the end of June. This decline was due
mainly to the effect of price changes of Tel Aviv Stock Exchange-traded shares (1.5 percent). The
decline was contrary to the increase of about NIS 100 billion in the value of the shares portfolio in
Tel Aviv in the past three quarters.
Bonds
During the second quarter of 2014, the value of negotiable corporate bonds in the portfolio increased
by about NIS 1.8 billion (0.7 percent), and reached about NIS 266 billion at the end of June, mainly
net investments, following net repayments of about NIS 4.3 billion in the first quarter of 2014. At
the same time, there was an increase of about NIS 34 billion 0in the balance of the government bonds
and makam portfolio, mainly by institutional investors.
Bank of Israel – Public's Assets Q2-2014
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The assets portfolio abroad
During the second quarter of 2014, the value of the portfolio held abroad by Israelis increased by
about NIS 11.7 billion (3 percent), and reached about NIS 400 billion at the end of June. The value
of the tradable bonds portfolio abroad increased by about NIS 6.4 billion (4.7 percent), and reached
about NIS 143 billion at the end of June. In parallel, the value of shares held abroad increased by
about NIS 5.8 billion (2.5 percent), and reached about NIS 234 billion at the end of June. This was
mainly comprised of net investments abroad by institutional investors and households. The increase
in these components was partially offset by the appreciation of the shekel against the dollar (1.4
percent) in the second quarter, which decreased the shekel value of the portfolio, in parallel with a
decline in the accumulation of deposits at banks abroad (1.9 percent).
3. Mutual funds
The value of the portfolio managed by Israeli mutual funds was NIS 261 billion at the end of June,
about 8.6 percent of the public's total asset portfolio and about 15.6 percent of the tradable portfolio.
In the second quarter of 2014, the value of mutual fund assets increased by about NIS 12.7 billion
(5.1 percent)—of which about NIS 11.8 billion was due to net accumulations (surplus of issues over
redemptions, minus dividends), and the rest was due to price increases in the markets.
A breakdown of mutual funds by specialization shows that net accumulations in the second
quarter were concentrated in “other” bonds, mainly CPI-indexed corporate bonds (about NIS 7.3
billion or 7.7 percent), and in State bonds (about NIS 4.9 billion, 13.3 percent). In contrast, there
were net redemptions in money market funds (about NIS 1.2 billion, 2.1 percent).
We note that, as of the end of June, the trend of accumulation of corporate bonds has been halted.
Preliminary data for July indicate net redemptions totaling about NIS 2 billion in mutual funds
specializing in CPI-indexed corporate bonds.
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* Further information on the public's assets portfolio can be seen on the Bank of Israel's website
www.bankisrael.gov.il .
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