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The Fixed-Income Exchange Traded Funds market in Israel is witnessing moderate growth, influenced by factors such as increasing investor interest in diversified income sources, the stability of government bonds, and a growing awareness of the benefits of passive investment strategies.

Customer preferences: Investors in Israel are increasingly gravitating towards Fixed-Income Exchange Traded Funds (ETFs) as they seek stability amid economic uncertainty. This trend is particularly pronounced among younger demographics, who are more inclined to adopt passive investment strategies for their portfolios. Additionally, a rising awareness of the benefits of diversification is shaping preferences, with many individuals favoring ETFs that provide exposure to government and corporate bonds. Cultural shifts towards financial literacy are also prompting more individuals to explore fixed-income options as a means to achieve steady income streams.

Trends in the market: In Israel, the Fixed-Income Exchange Traded Funds (ETFs) market is experiencing a notable shift as investors prioritize stability in their portfolios amidst economic fluctuations. Younger investors, in particular, are increasingly adopting passive investment strategies, favoring fixed-income ETFs that offer exposure to both government and corporate bonds. This trend reflects a growing awareness of diversification benefits and a cultural shift towards enhanced financial literacy. As more individuals seek reliable income streams, industry stakeholders may need to adapt their offerings and marketing strategies to cater to this evolving investor landscape.

Local special circumstances: In Israel, the Fixed-Income Exchange Traded Funds (ETFs) market is shaped by unique local factors, including a robust regulatory framework that encourages transparency and investor protection. The country's diverse economy, marked by technological innovation and a strong startup culture, fosters a growing demand for fixed-income products as investors seek stability amid geopolitical uncertainties. Additionally, cultural factors such as a collective focus on financial education and long-term savings are driving younger generations to embrace these investment vehicles, further influencing market dynamics.

Underlying macroeconomic factors: The Fixed-Income Exchange Traded Funds (ETFs) market in Israel is significantly influenced by macroeconomic factors, including global interest rate trends, inflation rates, and local economic stability. As global central banks adjust monetary policies, fluctuations in interest rates impact bond yields, directly affecting fixed-income investments. Israel's strong economic fundamentals, characterized by steady GDP growth and low unemployment, bolster investor confidence. Furthermore, fiscal policies aimed at maintaining budgetary discipline and promoting investment in infrastructure contribute to a favorable environment for fixed-income products. These dynamics, combined with global economic uncertainties, drive demand for fixed-income ETFs as a means of risk mitigation and portfolio diversification.

Data coverage:

The data encompasses B2C enterprises. Figures are based on financial values/ transaction values/ turnover ratios/ number of funds data within the investment funds market.

Modeling approach / Market size:

Market sizes are determined by both a bottom-up and top-down approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data from European central banks, World Bank, national central bank statistics, and international organizations, such as OECD, and publicly available databases. In addition, we use relevant key market indicators and data from country-specific associations, namely gross domestic product (GDP), consumer price index(CPI), lending interest rate, central bank interest rate, employment rate, secured overnight financing rate (SOFR), and tax rates. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In the market, we use the HOLT-damped Trend and ARIMA methods to forecast future development. The main drivers are GDP per capita, consumer price index (CPI), and central bank interest rate.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.