Israelis are shifting capital away from the TASE: Where did billions of shekels flow in August?
August data reveals a significant trend in the capital market as investors redeemed approximately 1 billion shekels from Israeli stocks, opting instead to move large sums into foreign assets and money market funds.
Naor Cohen, manager of consultant relations at Meitav Investment House, has summarized the mutual fund industry's performance for August 2026. The industry attracted approximately 7.7 billion shekels, with money market funds once again leading the inflow. Simultaneously, the trend of reallocating capital from Israeli stocks to foreign equities continues.
Naor Cohen commented on the market environment:
"August was characterized by high volatility in markets both in Israel and globally, yet leading international indices ended the month with a positive trend."
In the US, the Dow Jones index rose by 1.9%, the S&P 500 finished with a 3.3% gain, and the Nasdaq climbed 5.0%. In Europe, the German DAX posted a return of approximately 3.1%, while in Asia, the Nikkei index rose by 7.9%.
The Israeli stock market also ended August on a positive note: the Tel Aviv 35 and 125 indices recorded gains of 1.1% and 0.9% respectively, while the Tel Aviv 90 index rose by 0.2%. Both government and corporate bonds in Israel achieved a positive return of 0.4%.
Key Industry Insights
The fund industry raised about 7.7 billion shekels in August, with 4.0 billion flowing into money market funds. Excluding these, the industry raised 3.6 billion shekels, split between 1.7 billion in traditional active funds and 1.9 billion in passive instruments.
The shift from domestic to foreign equities remains clear: the Israeli stock category saw redemptions totaling 1.0 billion shekels, primarily through ETFs, while foreign stock categories attracted 2.1 billion shekels.
Among traditional active funds, general bond funds were the most successful, raising 0.8 billion shekels, followed by government bonds at 0.6 billion. In the passive sector, foreign stocks led with 2.1 billion shekels, followed by corporate bonds at 0.4 billion.
Total assets under management in the fund industry grew by 1.4% in August, rising from 834.4 billion to 846.4 billion shekels. This growth was driven by both net inflows and a 4.3 billion shekel increase in asset valuations.
