Israeli ETFs and Index Funds
How a traded fund differs from a mutual tracker, what management fees leave out, and how to compare products that look identical.
Traded fund against index fund
Both track an index; the difference is how you transact. An exchange-traded fund trades throughout the session like a share, at a price you can see. An index mutual fund is bought and redeemed at a price set once a day.
For a long-term holder that difference matters less than it sounds. Someone buying monthly and holding for years gains little from intraday dealing, and is better served looking at costs than at execution speed.
Management fees, and what they omit
The management fee is the published number but not the full cost. There are further expenses charged inside the fund, the bid-offer spread in the market, and the commissions of whichever broker or bank you buy through.
Between funds tracking the identical index, the difference in return over time comes almost entirely from these costs. When the index is the same, cost is close to the only thing separating them.
Currency exposure — the part most often missed
An Israeli fund tracking a US index exposes you to two things: the index, and the dollar against the shekel. An index up 10% in dollars can deliver less, or more, in shekels.
This is why currency-hedged versions of the same products exist. They remove that exposure at a cost. There is no single right answer — only the question of whether you want the exposure, which is worth answering deliberately rather than by accident.
Comparing them in practice
Start with the index. Two products tracking different indices are not competitors, however similar their names. Only once the index matches is a comparison meaningful.
Then compare total cost, and after that fund size and liquidity — a small, thinly traded fund can trade at a wider gap to its net asset value, and that is a cost no fee table shows.
Frequently asked questions
What is the difference between an ETF and an index fund in Israel?
An ETF trades on the exchange through the session at a changing price; an index mutual fund is bought and redeemed at a price set once daily. Both track an index — the difference is how you transact, not what they hold.
What is a currency-hedged fund?
A product tracking a foreign index while removing exchange-rate exposure, so the return reflects the index rather than the currency. The hedge carries a cost.
How do you compare two funds tracking the same index?
On total cost — management fee plus internal expenses — and on fund size and liquidity, which drive the gap between market price and net asset value.
Israeli companies we do cover
Tel Aviv market data is not available here. Israeli companies listed on Nasdaq and the NYSE — Teva, Elbit, Check Point, CyberArk, NICE, monday.com and others — do carry live prices and full analysis.
Israeli stocks on Wall Street →
More on the Israeli market
- The TA-35 Index
- Capital Gains Tax on Investments in Israel
- How to Start Investing in Israel
- The Shekel, the Dollar and Your Returns
This is neither investment advice nor tax advice.
Last updated: 2026-09-27