Israeli Investors Shift Billions From Local Stocks to Overseas Markets

Israeli mutual funds attracted approximately 7.7 billion shekels in August, primarily driven by cash funds which raised about 4 billion shekels, according to a summary by Naor Cohen, advisor relations manager at Meitav Investment House. Despite overall positive performance in global markets, with the Dow Jones up 1.9%, the S&P 500 up 3.3%, and the Nasdaq up 5.0%, and European and Asian markets also showing gains, a notable trend of Israelis moving investments from domestic stocks to foreign equities continues.

In August, Israeli equity funds saw outflows of about 1 billion shekels, mainly through exchange-traded funds (ETFs). Conversely, foreign equity funds attracted approximately 2.4 billion shekels. This shift indicates a preference among Israeli investors for international stock markets over their domestic counterparts.

Within traditional active funds, the general bonds category led with 800 million shekels raised, followed by government bonds with 600 million shekels. The passive fund industry raised 1.9 billion shekels, with index funds attracting 1.1 billion shekels and ETFs gathering 800 million shekels. Foreign equities were the top performer in passive funds, raising 2.1 billion shekels, while Israeli equities experienced significant redemptions, losing 800 million shekels.

The total assets under management in the Israeli mutual fund industry grew by 1.4% in August, reaching 846.4 billion shekels from 834.4 billion shekels. This growth was a result of net inflows of 7.7 billion shekels and a valuation increase of approximately 4.3 billion shekels.