2024 was the best year for saving in Israel since 2021 and the second best year in the past decade. Investors in retirement, savings, and advanced training funds enjoyed particularly strong returns, despite the war and its negative impact on the Israeli economy.
Avi Berkowitz, deputy chief investment officer at Mitav Dash for savings and pension funds, estimates that the average return on the path of advanced training funds over the course of a year was 13.2%, three times the average over the past decade.
Savings invested in stocks enjoyed higher returns in both Israel and the United States, where the S&P 500 rose 24.9% in 2024 despite declines on Wall Street in December. In Israel, the Tel Aviv 25 Index and the Tel Aviv 125 Index rose by 28% last year. As in 2021, Israel’s markets enjoyed 11 positive months with only one negative month (April) for savings.
Superannuation funds also had a positive year, with savings in higher-risk pathways for young people up to age 50 achieving an annual return of 15.2%, while pathways for 50- to 60-year-olds saw returns of 13.3%, and pathways for over-60s. He received returns of 10.3%.
Berkowitz said: “The increased risk in 2024 has paid off, and this is evident in the range of returns achieved in retirement paths. The higher the proportion of stocks (for those up to 50 years old), the higher the return.”
He also notes that “this year has seen strong price increases in stock markets in Israel and abroad, and increases in corporate bonds and, to a lesser extent, in government bonds in Israel, all of which have created a very good return for investors.” He points out that the market gains occurred despite the continuation of the war in Ukraine for the third year in a row, and the war in Israel, as well as unexpected events such as the fall of the Assad regime in Syria, and the collapse of France. government, weakening the coalition in Germany. The main reasons for the strong gains achieved by the markets in 2024 were the beginning of the trend of interest rate cuts in the United States and the election of Donald Trump as President of the United States.
In December, the Tel Aviv Stock Exchange (TASE) performed particularly strongly with the Tel Aviv 35 Index rising almost 6%, resulting in a positive total return, despite declines on Wall Street. The average return on the Public Provident Fund path last month is expected to be 0.9%, with the Equity path expected to show a similar increase of 0.8%. In contrast, the S&P 500 index fell 2.5% last month.
Published by Globes, Israel Business News – en.globes.co.il – on January 2, 2025
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