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How-to-Guide to Investing in Israel

WMI — Thu, 14 Mar 2024 08:00:51 +0000

So you want to support Israel, and be part of her economic success. But you don’t live in Israel, and don't travel there often. So how to do it? This article will help.

In other articles, we discussed why we invest in Israel. We described reasons such as currency and global diversification, and the desire to support the Land and people of Israel. Other reasons include participating in the prosperity Israel is experiencing since its rebirth, and enjoying the fruit of a strong and robust economy.

The “How”

So how can this be accomplished practically? By investing in Israel's capital market via Israeli stocks and bonds. This is done by opening an investment account with one of the established Israeli brokerage firms, or investing through a brokerage firm in your country. Accounts may be opened online in 30 minutes or through the mail - no need to travel to Israel to open the account. Citizens of almost all countries may invest in an Israeli brokerage account.

Wise Money Israel-managed investment accounts are regulated and supervised by the Israel Securities Authority and U.S. Securities and Exchange Commission (SEC). An investment account can be funded with all currencies (U.S. dollars, U.K. pounds, Canadian dollars, Euros, Israeli shekels, etc.) via a direct deposit or wire transfer to the brokerage where your account is held.

What can I invest in?

Accredited investors and non-accredited non-investors alike can invest in a wide array of investments, ranging from Israeli stocks offering dividend payments, to secure Israeli government bonds, through inflation-protected corporate bonds paying fixed quarterly interest payments, to Exchange Traded Funds tracking to market Israeli indices. The choice of how secure the portfolio is to be (or how risky) is entirely up to the account holder in consultation with our licensed Portfolio Management personnel.

Israel's national exchange offers all the major business sectors offered in other markets around the world, including: technology, real estate, industry and manufacturing, communication, biomedical, agrotech, insurance, finance and banking, commerce and services, chemical/rubber/plastics, food, transportation, etc. Of particular interest is the defense industry and oil/gas exploration sector, given Israel’s recent large-scale discoveries of these commodities. Companies in these and other sectors are listed on the Tel Aviv Stock Exchange. Additionally, many Israeli technology companies are listed on Nasdaq.

Types and size of accounts

Investment account may be opened as an individual account, joint account, partnership, organization, corporation, U.S. or Israeli trust or a through a U.S. retirement account rollover (Traditional or Roth IRA, 401(k), 403(b), 457, etc.). Once funded, foreign currency is converted to Israeli currency as needed, and then securities are purchased directly into the account (stocks, government or corporate bonds and ETFs).

Israeli securities are listed for the account holder on the Tel Aviv Stock Exchange (TASE), or are listed on Nasdaq.

Do I need to know Hebrew to invest?

No. All brokerages our firm works with (including Israeli brokerages, U.S. and international brokerages) provide an English web interface for clients to monitor their investments and view their performance daily, monthly, quarterly or annually. English account statements are issued quarterly to clients.

How much does it cost to hold an Israeli investment account?

Brokerage commissions are between 0% to 0.16% of the value of a given transaction.

U.S. and international brokerage do not charge additional fees.

One Israeli brokerage Wise Money Israel works with often charges a 0.19% custodial fee per year (based on funds in the account), and a flat $5/month fee. For a $100,000 account, this amounts to about $255/year.

Professional portfolio management services are offered by our firm with a fee on a sliding scale based on a percentage the amount of money held in the account annually.

Must I hold my investment for a certain period of time?

When investing in Israeli stocks, bonds, ETFs and mutual funds, transactions are made electronically (online) and immediate, with no penalties, extra commissions or sales loads upon withdrawal. Investors may buy and sell stocks, bonds, ETFs or mutual funds for a day or for ten years, with no difference in fees.

How are funds withdrawn?

Many brokerages allow online electronic direct withdrawal to your bank. Others require an online request form to execute an immediate wire transfer back to your listed bank account of any amount in the account in the currency of your choice.

What options are available for capital preservation?

Those interested in preserving their wealth in shekels more than they are interested in growth will tend to invest more in Israeli government bonds. Those bonds are backed by the Government of Israel (which has never defaulted on an a single interest or principal payment). Others that desire capital preservation, but are interested in higher yield than government bonds, choose instead Israeli corporate bonds. These bonds pay quarterly, bi-annual or annual interest payments in shekels into your account, and the payment amount may be unlinked, linked to inflation, linked to the USD, or vary according to interest rates.

Taxation

There is no tax levied on moving funds abroad or back to your home country. There is no tax on simply holding Israeli securities. Only Israel residents pay taxes on all gains in Israel. For the investor residing outside of Israel, virtually all stock and bond gains are not taxed in Israel (see our article on taxation here), and the investor pays taxes in their own country according to their country's taxation laws. Israeli capital gains and bond interest are taxed like other domestic gains in the investor's country of residence, and not in Israel.

Conclusion

Investing in Israel is possible and straightforward. Investors are able to diversify their holdings globally and participate in Israel’s economic success. Investor's funds are generally denominated in shekels. Investment accounts are secure and manageable in English. One can invest to either preserve capital or to receive good, solid returns. All this, while supporting Israel and its people.

The post How-to-Guide to Investing in Israel appeared first on Wise Money Israel.

Open My Israel Investment Account: where?

WMI — Tue, 15 Sep 2020 10:38:26 +0000

There are a number of options available to investors regarding which firm to use to buy and sell stocks and bonds on the Tel Aviv Stock Exchange. Which is the best one? This article discusses various Israeli brokerages and banks that provide independent and managed investment services in Israel, and a comparison of their fees, commission levels and services. We'll also discuss how you can open such an account.

There is one central Exchange in Israel where all securities (bonds, stocks, ETFs, mutual funds, etc.) are traded. There are 24 member institutions holding seats on the Tel Aviv Stock Exchange (TASE) that are allowed to facilitate transactions for individual and institutional investors. The TASE members are either investment brokerages, banks or insurance companies. Some of these firms offer services for independent and managed accounts for individuals, and others only service institutional investors. Only a select few brokerages offer investors from abroad investment accounts with full-service in English.

Having served many hundreds of clients over the past ten years, Wise Money Israel has determined that the English speakers are best served by opening their investment account at one of three recommended brokerage firms. Wise Money Israel assists investors in Israel and around the world to open and manage their Israeli investments, whether they be Israeli citizens/residents or non-citizens/non-residents. For help, contact us here or sign up for an investment account here.

Bank or brokerage?

Holding an investment account at a bank is expensive, compared with a brokerage firm. Banks tack on more fees than brokerages, and typically charge more in comparable fees and commissions than brokerages. Banks charge a variety of fees such as minimum transaction fees, account management fees, custodian fees, transaction cancellation fees, limit order change/cancellation fees, wire transfer reception fees, currency conversion fees, interest fees, dividend fees, cash withdrawal fees, etc. Brokerages typically charge only a small fraction of these fees, and when they do, you'll find the fee itself is much less. For example, the commission on a single buy or sell order will cost 0.6%-0.65% of the total transaction at the largest banks in Israel (Bank Hapoalim, Bank Leumi) with a minimum commission charge of 26-27 shekels ($8 USD). In comparison, investment brokers charge less than a quarter of that commission percentage, and in most cases the transaction minimum is between 2-5 shekels. At the same banks, the yearly account management fee is 0.6%-0.8% per year of the customer's account balance! This fee is also 75% lower at brokerages. Lastly, we have found that banks are usually less equipped to answer your investment questions, don't speak English, are often harder to contact, don't handle email, and will not be able to manage your money.

Which brokerage should you choose?

The majority of brokerages work only with institutional investors, but several are set up to also handle retail (individual) investors. These firms maintain online trading systems and reports in English and provide telephone/email customer support. These brokerages provide a good and convenient way to participate in the Israeli capital market through investing on the TASE, both for the small and larger investors. Client securities are held in the client's name centrally at the Tel Aviv Stock Exchange through one of these brokerages.

From our extensive experience facilitating client investment in Israel, we've found the best brokerages are: Interactive Brokers, Meitav Dash Trade and IBI. These brokerages offer low commissions per trade and good customer service. Many Wise Money Israel clients hold their investments at these brokerages and have been satisfied with their service. Each brokerage is set up to handle the needs of Israeli and non-Israeli investor and English speakers, and have English online interfaces for investment. Contact us for details on the rates Wise Money Israel has with each brokerage for the clients we manage.

What's the process?

Opening an individual, joint or organizational/nonprofit Israeli investment account requires filling out an application and for some countries providing identification. Wise Money Israel has helped hundreds of clients for over a decade open their brokerage account remotely via the Internet and also in person if/when the client is in Israel. Israeli and non-Israelis alike can open accounts.

Some of the above mentioned brokerage firms have a minimum opening account balance and other do not. You may wire your funds or transfer funds online with these brokerages, and one brokerage also accepts checks. Several brokerages pay interest on cash deposits when Israel's interest rate is sufficiently high. Funds can be withdrawn at any time from your investment account to your bank with a simple phone call or email as necessary.

Brokerage services offered

All investment brokerages Wise Money Israel works with offer the following features:

Account application in English
Online trading platform in English
Telephone customer service (some also email and chat)
Monthly/quarterly printed statements in English
Trading in stocks, bonds, Exchange Traded Funds, mutual funds, options, and currencies
Inexpensive wire transfer to/from your bank
Inexpensive currency conversion, much less than banks
Stock and bond information and online charting

In summary, investment accounts can be opened with a bank, insurance company or brokerage. Because of the fees and convenience, brokerages are preferable. You'll be able to invest easily yourself or utilize Wise Money Israel's investment management services at any of these brokerages. Start investing here!

To invite a speaker click here.

The post Open My Israel Investment Account: where? appeared first on Wise Money Israel.

Should I Consider Investing in Israel?

WMI — Fri, 17 Feb 2012 10:00:17 +0000

Why invest in Israel? Here are the top reasons people invest their money in the Holy Land. You'll also find out why foreign investors are putting billions of dollars in Israel and what makes its economy so special. Investing in Israel isn't just for the mega-rich or sophisticated investor; this article is about why you should consider linking some of your money with Israel regardless of the amount or your investment experience.

Top reasons to invest in Israel

Wise investors want international exposure and they know that Israel is an attractive investment destination. Foreign investors have been earning very good returns in the Israeli capital market.
Many people consider the compelling biblical reasons to invest in Israel as their guide when it comes to linking their money with the country.
Successful investors recognize Israel's economic strength, reaffirmed by its stability in the recent global financial crisis. It's a good place to put your money compared with the U.S., Europe and other developed markets.
As a smart investor, you should hedge against the weakening of your own currency by holding other strong currencies in your portfolio. Investing in Israeli securities ensures that all your eggs are not in one basket.
Investing in Israel connects you to the land and people of Israel and gives you a stake in its future growth.
It's a practical step that tells your children that Israel is important to you, because actions speak louder than words.
By investing in Israeli companies through stocks or corporate bonds, you support Israel, its people and its economy.
In these turbulent times, it is smart to have some capital outside of your country and currency because during severe economic crises, governments sometimes prohibit transferring capital out of the country.
Jewish families around the world need to be prepared because antisemitism is rising. It is imperative to learn from history and link a portion of your wealth to Israel.

Next in this series: our article

How can I invest in Israel?

There are many ways to invest in Israel or Israeli companies, from buying Israeli stocks on Wall Street, ETFs or mutual funds, bonds, or investing directly on the Tel Aviv Stock Exchange from an Israeli investment account. You can read more about our article for details.

Keep checking back on Wise Money Israel (or get email updates) to gain more insight and tips on how to wisely invest in the Israeli capital market.

The post Should I Consider Investing in Israel? appeared first on Wise Money Israel.

What God Says About Investing in Israel

WMI — Thu, 07 Apr 2011 12:23:36 +0000

The idea of investing in Israel, and what benefits you can expect from this investment, is a new idea to most people. It’s something they have never thought about. For others who have, it might be an intimidating concept, because they don’t know how they would go about it. Before you decide what you would like to do, and how you would go about it, let’s consider what the Bible has to say about investing in Israel. The Scriptures show why investing and supporting Israel is in line with God’s desires, they explain why it is in our best interest, and that it will bring blessing upon us. Here are eight biblical principles connected to Israel and investing in it:

Principle #1: God blesses Israel

From the time of its earliest history, Israel has been blessed by God. “The Lord spoke to Moses: ‘Tell Aaron and his sons, “This is the way you are to bless the Israelites. Say to them: ‘The Lord bless you and protect you; the Lord make his face to shine upon you, and be gracious to you; the Lord lift up his countenance upon you and give you peace.’”’ So they will put my name on the Israelites, and I will bless them” (Numbers 6:22-27).

God promised this blessing from the foundation of the people of Israel, through the forefathers. He said to Isaac, Jacob’s father: “I’ll bless you and make your children flourish because of Abraham my servant” (Genesis 26:24).

At one time an enemy of Israel, the King of Moab, decided to hire a seer to curse Israel. But, the seer Balaam couldn’t curse Israel, saying, “How can I curse one whom God has not cursed, or how can I denounce one who the LORD has not denounced? … Indeed, I have received a command to bless; he has blessed, and I cannot reverse it” (Numbers 23:8, 20). “Now Balaam saw that it pleased the LORD to bless Israel” (Numbers 24:1).

Throughout the Scriptures God indicates he will prosper the people of Israel: “The LORD remembers us and will bless us: He will bless the house of Israel” (Psalm 115:12).

We can imitate God who blesses Israel, by blessing Israel ourselves. There are many ways to do that. One good way you can choose to bless Israel is to invest in its companies and endeavors. If you are already saving and investing your money, you can take a stand and reallocate some of your investment portfolio to Israel. By doing this, you are casting your vote to bless Israel because you are backing the Israeli economy, strengthening its companies and aiding the financial achievements of its people. This is a very powerful step that makes a difference.

It’s not all about Israel, however. The Bible has much to stay about those who choose to bless Israel:

Principle #2: God blesses those who love and bless Israel

The Bible is clear when it comes to God’s promises for those who bless his people. God blesses those who bless Israel. These promises are repeated throughout Scripture:

“How beautiful are your tents, O Jacob, and your dwelling places, O Israel!... Blessed is the one who blesses you, and cursed is the one who curses you!” (Numbers 24:5, 9). Blessing is promised to those who bless Abraham and his descendants: “I will bless those who bless you, and whoever curses you I will curse; and all peoples on earth will be blessed through you” (Genesis 12:3). The lover of Jerusalem prospers: “Pray for the peace of Jerusalem! May those who love her prosper!” (Psalms 122:6)

We see that God is in the business of blessing us, when we are obedient to him and follow his divine principles.

Principle #3: The nations will be blessed through Israel

Jerusalem Golden Gate (Steven Conger)

As the Jewish people are beginning to return to the Lord, the nations will be blessed through Israel. The Bible says that. “Abraham will surely become a great and powerful nation, and all nations on earth will be blessed through him” (Genesis 18:18). God continues to make promises to Abraham about the people of Israel saying: “And through your offspring all nations on earth will be blessed, because you have obeyed me” (Genesis 22:18). “If you will swear by my name alone, and begin to live good, honest lives and uphold justice, then you will be a blessing to the nations of the world, and all people will come and praise my name” (Jeremiah 4:2).

We are living in exciting times, because in our lifetime a major historical event, tied to biblical prophecy, has occurred – the rebirth of the nation of Israel in its land. This event is important because there are promises related to the blessing of Israel when they are in possession of the land:

Principle #4: Israel’s blessing is tied to being in their land

Olive Tree (by LaRezistance)

In this past century, God has begun to miraculously return his people to the Land of Israel as spoken of in Ezekiel 37:1-14 in the vision of the dry bones. Jeremiah too, describes God’s promise to restore the people of Israel back to their land. “The Lord God of Israel who rules over all says, ‘I will restore the people of Judah to their land and to their towns’” (Jeremiah 31:23).

As God continues this historic work to regather the Jewish people, he will restore the wealth promised to Jacob: “I will restore the fortunes of Judah and the fortunes of Israel and will rebuild them as they were at first… all the nations of the earth which will hear of all the good that I do for them, and they will fear and tremble because of all the good and all the peace that I make for it” (Jeremiah 33:7,9). Zechariah also speaks of this historical turn of events and its favorable results for Israel: ”Thus says the LORD of hosts, ‘My cities will again overflow with prosperity, and the LORD will again comfort Zion and again choose Jerusalem’” (Zechariah 1:17).

God’s blessing on his people is connected to their being in the land God promised them: “The LORD your God will bless you in the land you are entering to possess” (Deuteronomy 30:16). “Stay in this land. Then I will be with you and will bless you, for I will give all these lands to you and to your descendants, and I will fulfill the solemn promise I made to your father Abraham” (Genesis 26:3).

Israel will be prosperous when the people are back in their land. The question is: are we participating in the blessing? God is, in fact, again blessing Israel as it returns to its land. By investing in Israel, you can take part in this End of Days ingathering, and God’s promised blessings to those who love Israel.

Principle #5: God stands with Israel

It is wise to invest internationally in countries that are secure. It is evident throughout the Scriptures that God defends Israel. This can be seen even in modern times when Israel has been attacked by its neighbors. Israel is precious to God – “for he who touches you, touches the apple of His eye” (Zechariah 2:8). “Indeed, he who watches over Israel will neither slumber nor sleep.” (Psalm 121:4). “Yet their Redeemer is strong; the LORD Almighty is his name. He will vigorously defend their cause” (Jeremiah 50:34).

The security of Israel is defended by God. Therefore we can feel secure in Israel and in investing in it.

Principle #6: God judges the nations concerning Israel

Because God stands with Israel and is concerned with its security and blessing, his judgment is coming on the nations, on those who do not stand with Israel. “I will gather all nations and bring them down to the Valley of Jehoshaphat. There I will enter into judgment against them concerning my inheritance, my people Israel, for they scattered my people among the nations and divided up my land… Let the nations be roused and let them go up to the valley of Jehoshaphat, for there I will sit in judgment on all the surrounding nations” (Joel 3:2, 12). “The day of the LORD is near for all nations. As you have done, it will be done to you; your deeds will return upon your own head” (Obadiah 1:15). “For the day is near, the day of the Lord is near; it will be a day of storm clouds, it will be a time of judgment for the nations” (Ezekiel 30:3).

The Gathering Storm (Dennis Wong)

God will soon punish the nations, especially those who come against Israel. It is becoming more apparent in these days that the nations of the world are coming against Israel. Even the United States, a long-time friend and ally, is making significant, unfavorable changes to its policies and actions against Israel. God’s judgment will surely have significant financial implications for these nations.

Biblical wisdom suggests that you can assure your own fate is different to the fate of your nation when it comes to God’s judgment regarding Israel. For example, Rehab, who hid the Israelite spies in Jericho, sided with Israel through practical actions, and was saved from her city’s destruction (Joshua 2, 6:17, 23-25).

By making personal financial choices that side with Israel, you may save yourself and your family from your nation’s financial fate.

Principle #7: Israel’s financial security and role in global finances

Israel is destined to be an important world financial center; a lender nation. In these global rocky financial times, where governments are borrowing money internationally, and risking the standing of their country with regards to their world economic status, God says about Israel: “For the LORD your God will bless you as he has promised, and you will lend to many nations but will borrow from none…” (Deuteronomy 15:6).

For decades, sound investment advice was to invest in financial institutions, as they control the flow of money and lend. It is even wiser to invest in lender nations. “The LORD will open the heavens, the storehouse of his bounty, to send rain on your land in season and to bless all the work of your hands. You will lend to many nations but will borrow from none” (Deuteronomy 28:12).

When the world economic system fails, many great countries will seek the blessing of God in Israel. “Many peoples and powerful nations will come to Jerusalem to seek the Lord who rules over all and to ask his favor” (Zechariah 8:22).

Principle #8: International exposure and diversification

Not only is it sound investing to diversify your holdings internationally, but it’s also scriptural.

Image by CIMMYT

“Send your grain overseas, for after many days you will get a return” (Ecclesiastes 11:1, Net Bible). Some scholars suggest that the imagery of the grain dealt with commercial business through international trade. This same verse advises investment diversification: “Divide your merchandise among seven or even eight investments, for you do not know what calamity may happen on earth” (verse 1). The chapter goes on to state:

“Sow your seed in the morning, and at evening let not your hands be idle, for you do not know which will succeed, whether this or that, or whether both will do equally well” (Ecclesiastes 11:6). Solomon shares his God-given wisdom with us regarding how we should invest. He tells us it is unwise to invest heavily only in one market, one country, one currency or one investment. Investing in a country with God’s blessing is a wise way to get international exposure, portfolio and currency diversification.

Conclusion

There are many reasons to invest in Israel. The Bible teaches us that Israel will be blessed, and that helping Israel brings blessing on oneself and one’s own nation. Israel is back in its land. This is a sign that its prosperity will be restored and it will once again be financially wealthy: a lender to many nations. You can make an impact on your own financial life and take advantage of biblical principles regarding what God promises for those who bless Israel.

Here are some related articles on how you can invest in Israeli stocks and bonds:

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