New blood in the ETF market? Two large American entities on their way to Israel

Two American investment management giants, State Street and First Trust, are preparing to enter the ETF market in Israel. The companies are advancing regulatory procedures to register index-tracking ETFs for trading on the Tel Aviv Stock Exchange, similar to moves by BlackRock and Invesco. Their entry is expected to increase competition and put pressure on management fees.

Two American investment management giants, State Street (State Street) and First Trust (First Trust), are preparing to enter the ETF market in Israel. State Street, which manages the SPDR brand with $6.2 trillion in assets, and First Trust, which manages $340 billion, are advancing legal and regulatory procedures to register index-tracking ETFs for trading on the Tel Aviv Stock Exchange. This move is similar to those made by BlackRock (2019) and Invesco (2022). Their entry is expected to increase competition in the local market, where existing foreign funds manage tens of billions of shekels. The companies are refraining from public announcements, partly due to fear of protest from organizations politically opposed to Israel. The Israeli market is attracting international investors due to the rapid growth in the number of private investors – 400,000 new trading accounts have been opened in recent years. Irish funds are characterized by low management fees (up to 0.1%), and competition may push management fees downward. State Street stated that the company is examining opportunities in Israel.