Israeli Mutual Fund Industry Shatters Records Amid Strong Market Growth
Translated & summarized from Ice by baba
Israel's mutual fund industry has set new records, with net fundraising reaching 53.5 billion shekels by the end of September 2026, driven by money market and bond funds. Despite outflows from the domestic banking index, overall market assets grew significantly, and new benchmark indices were launched.
The story in 6 lines · by baba
- Mutual fund industry fundraising hit record highs in September 2026.
- Total net fundraising reached 53.5 billion shekels year-to-date.
- Money market funds were the main growth engine, attracting 30.8 billion shekels.
- Domestic stock market, especially the banking index, saw significant redemptions.
- New benchmark indices for active funds were launched by the stock exchange.
- The shekel showed mixed performance against major currencies in September.
Israel's mutual fund industry has achieved record-breaking performance, with significant growth reported throughout September 2026. Net fundraising reached approximately 6.4 billion shekels in September, pushing the total net fundraising for the year to about 53.5 billion shekels. As of the end of September, the total assets under management in both active and passive funds stood at approximately 849.4 billion shekels, marking a half-year increase of about 97.1 billion shekels compared to the end of 2025.
The primary driver of this growth has been money market funds, which attracted net inflows of around 30.8 billion shekels year-to-date, including 3.6 billion shekels in September alone. Bond funds also saw strong demand, raising 1.5 billion shekels net in September and accumulating 26 billion shekels net since the start of the year. Overseas equity funds experienced positive inflows of 1.3 billion shekels net in September and 2.4 billion shekels net year-to-date, with the S&P 500 index being the most popular passive investment, attracting 866 million shekels net last month.
Conversely, the domestic stock market continued to face outflows. Israeli equity funds, both active and passive, saw net redemptions of about 104 million shekels in September, totaling 6.5 billion shekels net in redemptions for the year. The banking index was particularly weak, with 760 million shekels net redeemed in September and a substantial 12.1 billion shekels net redeemed year-to-date. However, Tel Aviv Stock Exchange equity indices excluding banks, led by the TA-125 and TA-90 indices, recorded net inflows of 764 million shekels in September.
In a significant development, the Tel Aviv Stock Exchange launched its TAF (Tel Aviv Funds) index family in September. This suite comprises 14 benchmark indices for active funds, covering approximately 77% of the industry's assets, aiming to enhance market transparency and comparability.
Regarding currency exchange rates in September, the shekel showed mixed trends. The dollar's representative rate closed the month at 3.063 shekels, a 1.7% increase for the month but a 3.7% decrease year-to-date. The euro traded at 3.475 shekels (down 0.5% for the month and 6.9% year-to-date), and the pound sterling was at 4.060 shekels (down 0.4% for the month and 5.2% year-to-date).
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