Israeli Mutual Funds Hit Historic Record of 853 Billion NIS in Assets
Israel's mutual fund industry hit a record 853 billion NIS in assets, growing 143% since 2021. The surge was driven by strong stock market gains and massive inflows into money market funds amid high interest rates.
Historical Milestone in Israel's Capital Market
Israel's mutual fund industry has crossed an unprecedented threshold, setting a new historic record of 853 billion NIS in assets under management. The impressive figures, analyzed by Naor Cohen, Director of Advisor Relations at the "Meitav" investment house, reveal a dizzying growth rate.
The industry has surged by 143% since March 2021, when it stood at just 351 billion NIS. This accelerated pace raises an intriguing question in the market: is the industry on track to cross the 1 trillion NIS threshold within the next 18 months?
Key Drivers: Market Returns and High Interest Rates
This massive growth, which includes net inflows of approximately 280 billion NIS alongside market returns (capital gains) of about 222 billion NIS, is driven by two primary factors:
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Sharp increases in equity markets over the past three years.
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The high interest rate environment, which, while typically cooling markets, in this case attracted numerous investors—including newcomers taking their first steps—who funneled vast sums into money market funds to secure solid yields.
Shifting Investor Preferences
A deeper look at the data reveals dramatic shifts in investor preferences over the last five years. Money market funds have emerged as the undisputed stars, registering a meteoric 914% surge in assets, with their share of the industry skyrocketing from 6% to 25%.
Concurrently, the passive investment sector (index-tracking funds and ETFs) grew by 145%, establishing a dominant presence.
However, short-term indicators suggest the pendulum is starting to swing back. Over the past six months, traditional active funds recorded a 6% growth rate, compared to just 2% for passive funds, pointing to a renewed interest in active investment management.
This record-breaking streak continues a consistent trend. In December 2025, according to a previous report by Naor Cohen of "Meitav," the industry had reached an all-time high, crossing the 750 billion NIS mark for the first time.
