How-to-Guide to Investing in Israel

So you want to support Israel, and be part of her economic success. But you don’t live in Israel, and don't travel there often. So how to do it? This article will help.

In other articles, we discussed why we invest in Israel. We described reasons such as currency and global diversification, and the desire to support the Land and people of Israel. Other reasons include participating in the prosperity Israel is experiencing since its rebirth, and enjoying the fruit of a strong and robust economy.

So how can this be accomplished practically? By investing in Israel's capital market via Israeli stocks and bonds. This is done by opening an investment account with one of the established Israeli brokerage firms, or investing through your current investment account in your country. Accounts may be opened online or through the mail - no need to travel to Israel to open the account. Citizens of all countries may invest in an Israeli brokerage account.

Israeli investment accounts are regulated and supervised by the Israel Securities Authority, and non-Israeli investment accounts are regulated by your countries securities regulator. An investment account can be funded with all currencies (U.S. dollars, U.K. pounds, Canadian dollars, Euros, Israeli shekels, etc.) via a direct deposit or wire transfer to the brokerage where your account is held.

Accredited investors and non-accredited non-investors alike can invest in a wide array of investments, ranging from Israeli stocks offering dividend payments, to secure Israeli government bonds, through inflation-protected corporate bonds paying fixed quarterly interest payments, to Exchange Traded Funds tracking to market Israeli indices. The choice of how secure the portfolio is to be (or how risky) is entirely up to the account holder in consultation with our licensed Portfolio Management personnel.

Israel's national exchange offers all the major business sectors offered in other markets around the world, including: technology, real estate, industry and manufacturing, communication, biomedical, agrotech, insurance, finance and banking, commerce and services, chemical/rubber/plastics, food, transportation, etc. Of particular interest is the new oil/gas exploration sector, given Israel’s recent large-scale discoveries of these commodities. Companies in these and other sectors are listed on the Tel Aviv Stock Exchange. Additionally, many Israeli technology companies are listed on Nasdaq, and can be accessed through one of the large U.S. or international brokerage firms.

Investment account may be opened as an individual account, joint account, partnership, organization, corporation, U.S. or Israeli trust or a through a U.S. retirement account rollover (Traditional or Roth IRA, 401(k), 403(b), 457, etc.). Once funded, foreign currency is converted to Israeli currency as needed, and then securities are purchased directly into the account (stocks, government or corporate bonds and ETFs).

Israeli securities are listed for the account holder on the Tel Aviv Stock Exchange (TASE), or are listed on Nasdaq by the broker-dealer in the U.S.

No. All brokerages our firm works with (including Israeli brokerages, U.S. and international brokerages) provide an English web interface for clients to monitor their investments and view their performance daily, monthly, quarterly or annually. English account statements are issued quarterly to clients.

Brokerage commissions are between 0% to 0.16% of the value of a given transaction.

Additionally, one Israeli brokerage charges a 0.19% custodial fee per year (based on funds in the account), and a flat $5/month fee. For a $100,000 account, this amounts to about $255/year.

Professional portfolio management services are offered by our firm on a sliding scale based on a percentage the amount of money held in the account annually.

Must I hold my investment for a certain period of time?

How are funds withdrawn?

What options are available for capital preservation?

Conclusion