9 ways to invest in Israel - Simplified
Following on from the the Demystifying Investing in Israel series.
Israel, often dubbed the "Scale Up Nation," continues to be a powerhouse of innovation and technological advancement. We are at a point , the investment landscape in Israel offers diverse and lucrative opportunities across various sectors. Here are ten ways to invest in Israel this year, with expanded insights on each. This article, along with the Invest in Israel Community Newsletter, and all other publishing, does not constitute as investment advice and guidance. So lets jump, or more correctly, gently walk, right into it.
1. Venture Capital Funds
Investing in venture capital (VC) funds that focus on Israeli startups is a strategic way to gain exposure to the country’s burgeoning tech ecosystem. These funds pool capital from multiple investors to invest in early-stage and high-growth startups, offering diversification and professional management. Top-tier VC firms like Sequoia Israel and Pitango Venture Capital have a track record of identifying and nurturing innovative startups. These firms provide not only financial support but also strategic guidance, making them to what would be considered a safer bet for those new to the Israeli market.
2. Direct Startup Investments
For those with a higher risk tolerance and a keen eye for emerging trends, direct investments in startups can be highly rewarding. Platforms like OurCrowd and SeedInvest provide access to vetted Israeli startups seeking capital. This approach allows investors to choose companies that align with their interests and expertise. For instance, if you have a interest in cybersecurity, or medical technology, you might look for startups developing cutting-edge security and medical solutions. This hands-on approach can yield significant returns, especially if the startup hits a major growth milestone or achieves a successful exit through an acquisition or IPO.
3. Israeli Real Estate
Israel's real estate market, particularly in major cities like Tel Aviv and Jerusalem, remains robust. Investing in commercial and residential properties can yield significant returns, given the limited land and high demand for space. Additionally, the government’s ongoing infrastructure projects, such as the expansion of public transportation networks, are likely to increase property values in the long term. For international investors, partnering with local real estate agencies can help navigate regulatory requirements and identify high-potential properties. If you're an Non-Israel citizen or you are not formally in the process of making Aliyah (immigration to Israel) then you will benefit significantly from specialist Israeli Real Estate and immigration lawyers
4. Israeli Publicly Traded Companies (Stocks) Listed on International Markets
There are many reasons why Israeli Entrepreneur's choose to float, or IPO their companies outside of Israel See the Full Guide to Buy Israeli Stocks from Outside of Israel, The Easy Way
The strategic reasons are primarily driven by access to larger capital markets, greater investor diversity, and enhanced global visibility. One significant factor is the sheer scale and liquidity of major international stock exchanges, such as the London Stock Exchange, the NASDAQ, New York Stock Exchange (NYSE). These platforms offer a much larger pool of potential investors compared to the Tel Aviv Stock Exchange (TASE). Many Israeli companies are listed on major stock exchanges such as NASDAQ and the Tel Aviv Stock Exchange (TASE). Investing in these companies provides a more liquid and less risky way to gain exposure to Israel’s economy. Notable examples include Teva Pharmaceuticals, a global leader in generic drugs, and Check Point Software Technologies, a pioneer in cybersecurity. By investing in these publicly traded companies, you can benefit from Israel's innovative edge while maintaining the flexibility to buy and sell shares as market conditions change.
Moreover, IPOing on international exchanges provides Israeli companies with enhanced credibility and global recognition. You can quickly ascertain all of the Israeli founded companies listed on the the financial markets by downloading Israel Stock List Ebook updated for 2024
5. ETFs and Mutual Funds
Exchange-traded funds (ETFs) and mutual funds focusing on Israeli markets or sectors provide a diversified and low-cost investment vehicle. Funds like iShares MSCI Israel ETF (EIS) offer exposure to a broad range of Israeli companies. These funds spread your investment across multiple sectors, from technology to pharmaceuticals, reducing risk while still allowing you to tap into Israel's growth. They are managed by professionals who continuously adjust the portfolio to align with market conditions, making them an attractive option for investors seeking a hands-off approach.
6. Managed fund on the Tel Aviv Stock Exchange
Wise Money Israel WMI offers fully managed, Premium investment accounts with Israel’s leading brokerage firms. With international clients in over 25 countries, your account can be opened as a personal account (single or joint), a U.S. IRA account, a trust, in custody for a minor, or as an account owned by companies, non-profits, partnerships or organizations. Premium personal accounts are available for clients who initially invest $50,000+ USD (or equivalent in another currency), with no limit to the level of funds that may be invested. Wise Money Israel (WMI) allows for NIS New Israeli Shekel-based investments of TASE stocks and bonds.
7. Government Bonds
For a more conservative investment, Israeli government bonds offer stability and reliable returns. These bonds are considered low-risk and provide a steady income stream, making them suitable for risk-averse investors. The Israeli government issues bonds in various maturities and interest rates, giving investors the flexibility to choose options that match their financial goals and timelines. The bonds are also highly rated, reflecting Israel's stable economic environment and strong fiscal management.
8. Technology and Innovation Sectors
Investing in specific sectors where Israel excels, such as cybersecurity, biotech, and artificial intelligence, can be particularly lucrative. Many Israeli companies in these fields are at the forefront of global innovation, making them attractive investment targets. For example, companies like CyberArk and BioCatch are leaders in cybersecurity, developing solutions that protect organizations worldwide. By focusing on these high-growth sectors, investors can capitalize on Israel’s reputation for technological excellence and its ability to attract top talent from around the globe.
9. Energy Sector
The discovery of natural gas fields off Israel’s coast has transformed its energy sector. Investing in companies involved in natural gas extraction, renewable energy projects, and energy infrastructure can offer significant growth potential. Companies like Delek Drilling and Energean are key players in the natural gas market, while others are making strides in solar and wind energy. With the Israeli government’s commitment to reducing carbon emissions and promoting renewable energy, this sector is poised for substantial growth in the coming years.
For those interested in making a positive social or environmental impact, Israel offers numerous opportunities in sectors like clean energy, education technology, and health tech. . Companies like OrCam, which develops assistive technology for the visually impaired, and Innoviz Technologies, which creates LiDAR sensors for autonomous vehicles, exemplify how Israeli innovation can drive positive change.
Conclusion
Israel’s dynamic economy and innovative spirit present numerous opportunities for investors in 2024 and beyond. Whether you are looking for high-risk, high-reward ventures in startups or more stable returns through government bonds and real estate, Israel has something to offer every type of investor. As always, thorough research and due diligence are crucial to making informed investment decisions..
Disclaimer: This article does not consistent investment advice or guidance.
Author- Jon Simmons - Bi-lateral trade an investment advocate for Israel, and content strategist for ambitious businesses looking to grow online. Contactable via LinkedIn.
Want to be kept up to date on future articles on how to support Israeli Businesses? Subscribe to the Open Invest Newsletter for free today.
The Israel Stock List Ebook updated for 2024 is now available for only $15. This simple eBook provides a comprehensive list of all the Israeli-founded companies that can be purchased on the international markets.
The Israel Stock Tracker contains all of the Israeli-founded companies listed on the New York Stock Exchange, NASDAQ, and London Stock Exchange. The spreadsheet allows you to track the share price of those Israeli-founded companies.
Purchase stocks in Israeli Founded Companies at Israeli-founded brokerage, Etoro, and join the millions of stock investors worldwide. Investors can buy stocks for as little as $100 deposit. Founded by serial Israeli brothers Yoni Assia and Ronen Assia.
Want to be kept up to date on future articles on how to support Israeli Businesses? Subscribe to the Open Invest Newsletter for free today.
Jon Simmons is a bi-lateral trade investment advocate for Israel and its supporters, and content strategist for ambitious businesses looking to grow online.
