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The Prime Money Market Funds market in Israel is experiencing phenomenal growth, fueled by factors such as heightened investor interest, favorable regulatory changes, and the demand for liquidity among institutional and retail investors seeking stable returns.

Customer preferences: Investors in Israel are increasingly gravitating towards Prime Money Market Funds as they seek stable returns amid economic uncertainty. This trend is amplified by a growing preference for liquidity, especially among younger, tech-savvy investors who value quick access to their funds. Additionally, the rise of digital platforms for fund management is reshaping how individuals engage with their investments, promoting a culture of informed decision-making. As financial literacy improves, more consumers are diversifying their portfolios, recognizing the benefits of these funds for both short-term stability and longer-term growth.

Trends in the market: In Israel, the Prime Money Market Funds sector is experiencing a notable shift as investors prioritize stable returns amidst economic volatility. This trend is particularly pronounced among younger, tech-savvy individuals who favor liquidity and quick access to their funds. The emergence of digital platforms is revolutionizing investment management, enhancing engagement and fostering informed decision-making. As financial literacy increases, more investors are diversifying their portfolios, leveraging Prime Money Market Funds for their short-term stability and potential for long-term growth, signaling a significant transformation in investment strategies within the country.

Local special circumstances: In Israel, the Prime Money Market Funds sector is shaped by a blend of cultural and regulatory factors that distinguish it from other markets. The country’s robust technology ecosystem has fostered innovation in financial services, leading to the rise of fintech platforms that cater to a younger demographic seeking flexible investment options. Additionally, the regulatory framework encourages transparency and consumer protection, enhancing investor confidence. This unique environment promotes a culture of financial literacy, driving a shift toward diversified portfolios that leverage Prime Money Market Funds for both liquidity and stability.

Underlying macroeconomic factors: The Prime Money Market Funds sector in Israel is significantly influenced by macroeconomic factors including interest rates, inflation, and national economic stability. The low-interest-rate environment globally encourages investors to seek higher yields through Prime Money Market Funds, while domestic inflation rates impact real returns. Additionally, Israel's strong economic performance, characterized by robust GDP growth and low unemployment, bolsters investor confidence. Fiscal policies promoting investment and innovation further enhance the attractiveness of these funds. As global economic trends shift, the interplay of these factors shapes the demand for liquidity and stability in investment portfolios, driving growth in the Prime Money Market Funds 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.