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Israel's mutual funds were slammed by heavy redemptions as 2005 rolled to a close, and the hemorrhage hasn't stopped this year. The banks have lost another billion shekels from mutual funds they run since 2006 began.

In November and December 2005, the public withdrew no less than NIS 9 billion from mutual funds, mainly the four biggest ones ? Hapoalim's PKN (which has been bought by the Solomon-Markstone group) and Lahak; and from Leumi's Pia and Psagot mutual fund management companies.

However, mutual funds run by Bank Discount, Mizrahi and First International Bank (Beinleumi) have also suffered from redemptions.

In the space of three months, the banks have watched NIS 10 billion pour out of the mutuals.

PKN has been the worst hit, losing NIS 350 million this year, followed by Pia (sold to Harel) with withdrawals of a quarter-billion shekels. Through three months PKN has lost about NIS 3 billion assets under management.

Lahak has seen NIS 200 million leave while Psagot, the biggest company in its sector (and sold to York Capital Management), has managed lost NIS 1.4 billion