Israeli Hedge Funds Outperform TA-125 Index With 11% Average Return in First Half of 2026
The first half of 2026 served as a significant test for Israel's hedge fund industry, which appears to have performed well. Preliminary data shows that major equity hedge funds achieved an average return of 11%, surpassing the 9% gain of their benchmark, the TA-125 index, during the same period. This marks a reversal from 2025, when the TA-125 posted a 51% return, outpacing the hedge funds' average of 41%.
Among the top performers is the newly established Sfera Long fund, which rose 35% in the first half of 2026 after raising over half a billion shekels since its 2025 inception. Sfera Long is part of the veteran Sfera hedge fund group, founded over 20 years ago by Ron Santor, Doron Brin, and Israel Mor. Following Sfera Long, Hatzavim Long, founded in 2018 under Yoram Hadar's hedge fund company, gained 17%, and Nokad Long, managed by former Psagot executives Roy Vermus and Shlomi Bracha and known as Israel's largest hedge fund with nearly 20 billion shekels in assets, increased by 13%.
At the lower end, Alpha Erech, one of the oldest funds established in 2007 by Gabi Dishy and Michael Weiss, posted a 1% gain, while Trio and Var Equity funds recorded 6% and 7% returns respectively. June proved challenging as the TA-125 index fell nearly 10%, influenced by geopolitical tensions following a US-Iran memorandum of understanding. Despite this, many hedge funds limited losses to less than half of the market decline, demonstrating their risk mitigation strategies.
A senior hedge fund industry figure told Globes that after a strong 2025, the market correction in early 2026 prompted a shift toward stocks with reasonable valuations, such as banks and major local companies in food and communications. The expert noted that institutional pension savings are expected to continue flowing into the local market, although there may be a renewed investor interest in foreign markets like the US following recent profit-taking in Israel.
Hedge funds remain a sophisticated investment vehicle accessible to qualified investors with liquid assets exceeding 10 million shekels and institutional entities. The sector's ability to protect against market risks was notably tested in June, with many funds demonstrating resilience amid volatility.
