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The Exchange Traded Funds market in Israel is witnessing remarkable growth, fueled by factors such as increased investor interest in diversified portfolios, enhanced market accessibility, and the rising popularity of passive investment strategies among retail and institutional investors.

Customer preferences: Investors in Israel are increasingly gravitating towards Exchange Traded Funds (ETFs) as they seek greater transparency and lower fees in their investment choices. This trend is bolstered by a younger demographic that values technology-driven solutions, with many preferring mobile trading platforms for real-time access to market data. Additionally, a growing awareness of sustainable and socially responsible investing is influencing consumer preferences, pushing funds that align with ethical values into the spotlight. This shift reflects broader lifestyle changes and a desire for impactful investment strategies.

Trends in the market: In Israel, the Exchange Traded Funds (ETFs) market is experiencing significant growth, driven by a surge in investor demand for low-cost, transparent investment options. This trend is particularly pronounced among younger investors who prioritize technology and mobile platforms for seamless trading experiences. Moreover, there is an increasing focus on sustainable investing, with a notable rise in funds that emphasize environmental, social, and governance (ESG) criteria. This evolving landscape not only highlights changing investor preferences but also poses opportunities and challenges for fund managers and financial advisors striving to meet these demands.

Local special circumstances: In Israel, the Exchange Traded Funds (ETFs) market is uniquely shaped by a combination of cultural, technological, and regulatory factors. The country's strong emphasis on innovation and technology fosters a vibrant fintech ecosystem, enabling the development of user-friendly trading platforms that attract a tech-savvy younger demographic. Additionally, Israel's diverse population, with varying investment philosophies, encourages a broader array of ETFs, including those focusing on local industries. Regulatory support for transparency and competition further enhances investor confidence, driving the market's expansion amid a backdrop of evolving financial literacy.

Underlying macroeconomic factors: The Exchange Traded Funds (ETFs) market in Israel is significantly influenced by macroeconomic factors such as global market trends, national economic stability, and fiscal policies. The ongoing globalization of financial markets allows Israeli ETFs to tap into international investment opportunities, enhancing diversification for local investors. Additionally, Israel's robust economic performance, characterized by low unemployment and steady GDP growth, fosters consumer confidence and encourages investment in ETFs. Fiscal policies promoting innovation and technology further stimulate the fintech landscape, while global interest rate fluctuations and geopolitical considerations impact investor sentiment, shaping the overall performance of the ETF market.

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.