With Israel’s strong technology and innovation sectors, Israeli stocks have become increasingly attractive to global investors in recent years. However, navigating Israel’s stock market as a foreigner can be challenging. This article provides an overview of the top performing Israeli stocks, key sectors and industries to watch, and different ways for international investors to gain exposure to Israeli equities. Drawing upon analysis of major Israeli companies and stock performance data, as well as research into Israel’s overall economic outlook, this guide aims to help global investors better understand opportunities in Israeli stocks and how to invest in them.
Israel’s Robust Technology Sector Drives Growth in Israeli Stocks
Israel has emerged as a global technology powerhouse, with more startups per capita than any other country in the world. This vibrant startup ecosystem and culture of innovation have fueled growth in major Israeli tech companies. Many of Israel’s largest public companies by market capitalization are now in the technology sector, including Check Point Software, Wix.com, and CyberArk Software. Beyond established tech giants, some Israeli startups pursuing innovative technologies like artificial intelligence, cybersecurity, and autonomous driving have seen valuations skyrocket after going public in recent years. The technology sector’s outsized impact on Israel’s economy and the success of Israeli tech IPOs have made technology stocks a major driver of the country’s public equity markets.
Top Performing Israeli Stocks Span Key Industries Like Tech, Healthcare, and Real Estate
In addition to technology, other sectors of Israel’s economy and stock market have demonstrated strong performance and growth potential. For example, major Israeli pharmaceutical companies like Teva Pharmaceutical, one of the world’s largest generic drug makers, have remained competitive globally. Israel also boasts innovative medical device and biotech firms. Real estate, banking, chemicals, and energy are additional well-represented sectors on Israel’s stock exchange. Investors seeking diversified exposure to Israeli equities can look to leading companies across these major industries. Some of the highest performing Israeli stocks over the last decade have come from sectors like banking and real estate, highlighting the importance of looking beyond just Israel’s internationally renowned technology sector.
Passive Investment Strategies Provide Broader Exposure to Israeli Stocks
For international investors, the simplest way to gain exposure to Israeli stocks is often through passive investment strategies like index-based exchange traded funds (ETFs). There are ETFs tracking various Israeli equity indexes, allowing investors to easily buy a basket of stocks representing different sectors and market capitalizations. For example, the iShares MSCI Israel ETF (EIS) tracks an index of Israeli stocks across all sectors and sizes. Some Israel-focused ETFs target more specific market segments, like small cap stocks. Weighing factors like fees, liquidity, sector exposure and diversification, passive strategies through ETFs offer international investors an efficient means to invest in Israeli stocks.
Active Investment Approaches Allow More Tailored Exposure
Active investment strategies provide international investors another option to hone in on specific Israeli stocks and sectors. Global mutual funds focused on Israeli equities often employ fundamental analysis to pick individual stocks across sectors like technology, healthcare, real estate and finance. For investors who want to zero in on Israel’s technology sector, managed tech-focused funds represent an active approach. Comparing holdings, historical performance, sector exposures, costs, and manager track records can help investors identify actively managed Israeli equity funds aligning with their interests and risk preferences. While often more expensive than passive ETFs, active Israel funds allow for more customized sector, style, and risk exposures.
With strong past performance across major stock sectors and industries, Israel’s equity market presents compelling investment opportunities. Both passive index strategies and targeted active approaches can help global investors seeking exposure to Israeli stocks position their portfolios to capture this growth potential. Understanding Israeli companies, stock performance trends, and different investable securities provides a foundation for successfully accessing Israel’s public equities.