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The Mutual Funds Market within the Investment Funds Market in Israel is experiencing moderate growth, influenced by factors such as increasing investor interest, diversification strategies, and the appeal of professional management in navigating market volatility.

Customer preferences: Investors in Israel are increasingly favoring sustainable and socially responsible mutual funds, reflecting a growing awareness of environmental, social, and governance (ESG) issues. This trend is particularly pronounced among younger, tech-savvy demographics who prioritize ethical investing and alignment with personal values. Additionally, the rise of digital platforms has made mutual fund investments more accessible, attracting a broader audience eager for diversification and professional management. This shift indicates a cultural evolution towards conscious consumerism in the financial sector.

Trends in the market: In Israel, the Mutual Funds Market is experiencing a notable shift towards sustainable investment options, with a marked increase in demand for funds that emphasize environmental, social, and governance (ESG) criteria. This trend is particularly evident among millennials and Generation Z investors, who are leveraging technology to select funds that reflect their ethical values. Additionally, the proliferation of user-friendly digital investment platforms is democratizing access to mutual funds, enabling a wider demographic to engage in diversified portfolios. This evolution signifies a transformative moment for industry stakeholders, compelling fund managers to adapt their strategies to meet the growing demand for responsible investing and innovation in fund offerings.

Local special circumstances: In Israel, the Mutual Funds Market is shaped by a unique blend of cultural and regulatory factors, fostering a strong inclination towards innovation and sustainability. The nation's emphasis on technological advancement, coupled with a vibrant startup ecosystem, encourages the development of digital investment platforms that cater to diverse investor needs. Additionally, Israel's regulatory framework promotes transparency and accountability, enhancing investor confidence in ESG-focused funds. This environment not only attracts local investors but also positions Israel as a leader in responsible investment practices within the global market.

Underlying macroeconomic factors: The Mutual Funds Market in Israel is significantly influenced by macroeconomic factors such as robust economic growth, low unemployment rates, and a stable inflation environment. The nation’s strong fiscal policies, which emphasize fiscal responsibility and public investment, bolster investor confidence and encourage participation in mutual funds. Additionally, global economic trends, such as the rise of sustainable investing and heightened demand for ESG-compliant products, are reshaping investment strategies. Israel’s innovative financial sector, backed by a skilled workforce, further enhances its attractiveness as a hub for diverse mutual fund offerings, catering to both local and international investors.

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.