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The Analyst brokerage is the most successful mutual fund manager in Israel, according to Haaretz's 2003 rankings for share-oriented mutual funds.

The company's first place comes because of only six funds that managed to outperform the relevant market indices over at least three years, three were run by Analyst - Analyst Gemisha (Flexible), Analyst Technologies and Analyst Tel Aviv 100.

The other three star performers were Ramco 20, a flexible fund managed by Ramco; Meitav Tel Aviv 100, managed by Meitav; and Dikla-Mondial, a member of the Dikla group of funds run by First International Bank.

What makes these funds' performance particularly impressive is that the Tel Aviv Stock Exchange fell in 2001 and 2002 but rose in 2003. Very few fund managers can outperform both a falling market and a rising one.

The rating received by Analyst in 2003 is the highest any fund management company has received since Haaretz began publishing its rankings in 1999. Analyst is one of Israel's oldest and best known fund management companies, although it recently lost to Meitav its title as the largest private (nonbank) fund manager.

In general, 2003 was a good year for share-oriented mutual funds. A full 87 funds, or 52 percent of all the funds Haaretz surveyed, managed to outperform the relevant market indices this year. During the previous four years, the majority of funds under performed the relevant indices.

Nevertheless, it seems unlikely this positive trend will be sustained over the long term. Of the 102 funds Haaretz tracked over the five-year period from 1999-2003, only three managed to beat the cumulative performance of the relevant indices over these years. Consistently high-quality fund management is evidently a rare commodity.

The Haaretz rankings do not relate to whether a fund's overall yield was positive or negative. Instead, they judge each fund according to the relevant market index. Funds that specialize in the shares comprising the Tel Aviv 25 Index, for instance, would be measured according to the performance of that index.

This "benchmark" method, which is the most common method used worldwide, is meant to determine whether the funds are justifying the management fees they charge by producing better results than an investor could achieve by either buying shares on his own or investing in an index fund (a fund that exactly mimics the relevant index, with managers having no discretion).

All data in the rankings was calculated for Haaretz by Meitav.