Overall return depends on several factors, primarily on the client’s risk profile, investment preferences, length of time invested, and also on market conditions. Having said that, since 2009**, the Israeli capital market has had yielded the following annual returns:
- Tel Aviv 35 Stock Index (large cap): 9.03% average annual return
- Tel Aviv Small Medium Enterprise 60 Stock Index: 14.17% average annual return
- Tel Aviv 60 Bond Index (large cap, Israeli corporate bonds, inflation protected): 6.21% average annual return
Past performance is not indicative of future results. All investments involve risk, and potential loss of principal. Further, the principle value of an investment will fluctuate; thus any investment when liquidated may be worth more or less than its original cost.
** Jan. 1, 2009 - March 3, 2019
While Israeli investors are taxed upon realizing gains, foreign investors generally are not taxed in the Israeli capital market. This means foreign investors will not pay tax on capital gains on stocks and bonds, and not pay tax on bond interest payments. Both Israeli and foreign investors need not file taxes in Israel.
Foreign investors will likely be required by their home country to report their Israeli investments and pay taxes in your country of residence (just like your local investments).
Foreign investors will be taxed at the source (by the brokerage) for gains from mutual funds and dividend payments on stocks that pay dividends. As Israel has tax treaties with many nations, you should receive a tax credit for taxes paid in Israel in your country of residence, so that you aren't doubly taxed on the same income*.
*This is not a substitute for professional tax advice from a certified accountant. It is the clients sole responsibility to understand their own local tax laws and abide accordingly with or without the assistance of a licensed tax professional.
All Israeli securities and financial assets, both stocks and bonds, are traded on the electronic Tel Aviv Stock Exchange. Established in 1953, here are some characteristics of the TASE:
- Average Daily Turnover: 1.4 Billion NIS
- Market Capitalization: $450 Billion
- Number of Equities: 448
- Number of Bonds (Government & Corporate): 725
- Exchange Traded Funds: 591
- Mutual Funds: 1,450+
- Members Firms: Bank of Israel, 14 banks, 8 brokers
- Securities are held centrally at the TASE in the name of the investor
- Securities are purchased and sold through an investment account at a Member Firm
- Securities are traded in Israel's local currency, the Shekel
- The Israel capital market also offers derivative trading as well as foreign currency exchange
- Member Firms also offer trading on other global Exchanges outside the TASE in multiple currencies
Israel has an international credit rating of AA- that has steadily risen over recent years (as many other Western nations' ratings have fallen). Israel's economy has performed exceptionally well, even during the global financial recession of 2008-2009. For any investment there is a certain level of risk, even if your money is kept in a bank or in a safe at home, the questions is how that risk is mitigated while still maintaining solid returns*.
Israel is considered by many to be a peaceful and safe place to live. Occasionally there are security considerations and wars, which can lead to volatility in the market. History shows that the Israeli capital market prices tends to drop moderately in anticipation of conflict with neighboring nations, but during and following the conflict the market recover far beyond their pre-conflict levels. This has provided interesting entry points in which to buy securities.
Israel's markets, while sometime more volatile than Wall Street, offers unique opportunities for upside through innovative Israel companies. For mid- and long-term investors, the Israeli stock market has returned returns far outpacing Wall Street.
As Israeli securities are denominated in local currency, this presents both a risk but also a diversification possibility. The Shekel has appreciated in the past 15 years considerably against other Western currencies.
As we are licensed by the Israel Securities Authority, Wise Money Israel works with clients to set clear investment objectives, taking into account the risk appetite (or lack thereof) of each individual client.
*All investments involve risk, and loss of principal. Further, the principle value of an investment will fluctuate; thus any investment when liquidated may be worth more or less than its original cost.