Historically, the fourth quarter of the year is considered strong and the one that brings increases in the markets. But in early October, US markets were once again shaky, with the S&P 500 posting its “worst day since April”, and markets falling as much as 3% as the US trade war with China escalated again. Then US President Donald Trump said that China is holding the world “captive” in the field of metals. However, all of this now seems like distant history and irrelevant to savers.
By the end of the month the two leaders met, the spirits calmed down at least for the time being, and the savers in the provident funds, the pension funds and the training funds once again register a particularly positive month. According to the forecast of Avi Berkowitz, Deputy Chief Investment Manager at Meitav Gamel and Pension, those saving in the general tracks are expected to benefit from a 1.5% increase in October (range of 1.2%-1.8%) and those in the equity tracks will see a return of 2.3% (range of 1.9%-2.8%). Those who are saving for a pension in the up to 50-year-old track are expected to see an increase of 1.3%, On the other hand, those in the 60-year-old and older sectors are expected to see an increase of 0.8%. We note that today, Friday, there will be trading on Wall Street, but most of the cash registers ‘closed’ the month yesterday, Thursday, and today’s trading will affect the returns for the month of November.
Berkowitz explains that the reason for the strong returns in the tracks is that “in October, there were price increases in shares in Israel and in the world, and in corporate and government bonds in Israel, which contributed to the positive return of the funds. On the other hand, the weakening of the foreign exchange reduced approximately 0.3% of the funds’ returns.”
Those who were once again hit the hardest are the savers in tracks that mimic the S&P 500 index – these are expected to see a return of only 0.5% even though the S&P 500 index itself rose by 2%. The reason is the continued strengthening of the shekel at a rate of 1.5% in October.
In October, by the way, the Nasdaq jumped by 4.1% and also in Israel the Tel Aviv 35 index completed a 2.3% increase – all at the beginning of the month – the Tel Aviv 90 index also jumped by 4.1% at the same time. The one that stood out in particular was the Japanese Nikkei index which jumped by 13.9% in October.
The year 2025: one of the strongest for savers for many years
Currently, the year 2025 is already shaping up to be one of the best years for Israeli savers, when, according to a Globes test, it is the strongest period since 2009, when the subprime crisis in the US emerged.
Berkowitz also agrees and points out that the year 2025 appears to be one of the best years for savers of the provident, training and pension funds. In the first ten months of the year, the funds are expected to register an average positive return of 12.8% in the general routes. In 2021, which was the strongest year so far, a return of 12% was recorded in the first ten months and 14.3% for the entire year.
The equity route has so far provided a return of 21.2% since the beginning of the year, while that of the S&P 500 route disappointed with an increase of only 5.3%, as mentioned due to the significant strengthening of the shekel, of about 11%. But the effect of the strengthening of the shekel hurt not only the routes that imitate the S&P 500 index but also the general routes. According to Berkowitz’s calculation, without the significant strengthening of the shekel against the dollar, the return of savers in the general routes would have been about 15%.
Impressive increases have also been recorded in the pension funds since the beginning of the year with a return of 14.7% in routes for those aged 50 and under and up to 9.7% in routes for those aged 60 and over.
Israel is the leader, but the world also saw strong increases
Since the beginning of the year, the Israeli market continues to lead the increases in the world with an incredible jump of almost 37% in the TA 35 index, and TA 90 increased by 37.3%. Adequate increases of more than 5.5% were also recorded in corporate and government bonds.
Globally, the S&P 500 index completes an increase of 16% since the beginning of the year, while the Nasdaq jumps by 22%. In Europe, the German DAX also jumps by more than 21%, while the French CAC completes an increase of 10.5%. The Japanese Nikkei also jumps since the beginning of the year with a jump of 28.7% and the emerging markets stand out for the better with a jump of 31.3%, “more than all the stock markets the central ones”.
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