Mutual Fund Assets Surge to Record NIS 853 Billion Amid Market Rally
The Israeli mutual fund industry reached a record NIS 853 billion in assets under management. Driven by market rallies and high interest rates, money market funds surged by 914% over the past five and a half years.
The mutual fund industry continues to break historical records at an unprecedented pace. At the beginning of September, the volume of assets under management in the industry reached approximately NIS 853 billion, after crossing the NIS 850 billion threshold for the first time on September 2.
This new peak comes exactly six months after the industry crossed the NIS 800 billion mark on March 2. Just three months prior, on December 2, 2025, it stood at NIS 750 billion. This means that in just nine months, more than NIS 100 billion was added to the industry's assets.
A longer-term perspective illustrates how exceptional this growth rate is. At the end of March 2021, the assets of the fund industry totaled approximately NIS 351 billion. Since then, in about five and a half years, they have grown by approximately NIS 502 billion—a surge of 143%.
Key Drivers: Market Rallies and Capital Inflow
Two main engines are driving this growth:
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Rallies in capital markets, particularly in global equity markets over the past three years.
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Inflow of investor funds into mutual funds, benefiting from positive market momentum and the entry of new investors.
Out of the NIS 502 billion growth since March 2021, approximately NIS 280 billion came from net inflows, while another NIS 222 billion is attributed to the yields generated by the assets.
The Rise of Money Market and Passive Funds
One of the most prominent shifts during this period is the strengthening of the passive industry and money market funds at the expense of traditional active funds. The assets of passive funds (ETFs and tracking funds) grew by 145% over the last five and a half years, compared to a growth of only 50% in traditional active funds.
Consequently, the share of active funds in the industry fell from 51% to 31%. The share of passive funds remained relatively stable at around 43%–44%, mainly due to the dramatic surge in money market funds. The assets of money market funds grew by no less than 914% during this period, and their share in the industry jumped from 6% to 25%, driven by the high-interest-rate environment.
However, in recent months, a slight trend reversal has emerged. Over the past half-year, the assets of traditional active funds grew by 6%, compared to a growth of only 2% in passive funds, continuing a strengthening of the active channel that began about a year and a half ago.
