Invest in Israel: Cutting-Edge Innovation and Lasting Opportunities
February 27, 2025
Read Time 3 MIN
Israel stands as a global leader in innovation, driven by its unparalleled research and development (R&D) spending and thriving startup ecosystem across key sectors like technology, healthcare, and clean energy. Israel’s economic success is not just a product of its entrepreneurial spirit—it is actively reinforced by strategic government policies.
Innovation and Global Leadership
Israel has firmly established itself as a world leader in innovation, boasting the highest R&D spending as a percentage of GDP among developed markets. Frequently referred to as the "Startup Nation," Israel consistently ranks among the top countries for producing high-growth startups and unicorns.
Major Publicly Traded Companies Founded in Israel
Source: Factset as of 2/20/2025
Not intended as a recommendation to buy or sell any names referenced herein.
Robust Exit Deal Ecosystem
Exit deals, whether through IPOs or mergers and acquisitions (M&A), are a key indicator of economic health, as they reflect investor confidence, market maturity, and the ability of private companies to scale successfully. Israel has consistently maintained a high volume of significant exit deals, demonstrating the strength of its start-up ecosystem and its capacity to attract global capital. A steady flow of exits signals a thriving innovation cycle, where successful companies reinvest in new ventures, driving sustained economic growth. In 2024, Israeli tech exits (M&As and IPOs) grew to $13.4 billion,1 and 67% of those exits were valued at or above $100 million.2
Annual Number of Tech Exit Deals in Israel
Source: Statista as of 2024
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Proactive Government Policy Support
Through regulatory reforms, international trade agreements, and targeted investment incentives, the Israeli government plays a crucial role in fostering business growth. Initiatives such as the Abraham Accords, innovation grants, and infrastructure investments are designed to strengthen the economy, support local industries, and integrate Israel further into global markets. These policies provide a stable foundation for businesses to thrive, attracting both domestic entrepreneurs and international investors.
Two examples of this support include:- Israel Innovation Authority (IIA) – Provides funding, grants, and policy support to foster R&D and high-tech growth, ensuring Israel remains a global innovation leader. This drives job creation, attracts foreign investment, and strengthens the country’s competitive edge.
- Abraham Accords – Facilitates trade, investment, and economic collaboration between Israel and several Arab nations, unlocking new markets and business opportunities. This enhances regional stability, boosts exports, and fosters economic diversification.
Gain Exposure to Israel’s Vibrant Economy with ISRA
An allocation to Israeli equities via the VanEck Israel ETF (ISRATM) offers investors the opportunity to benefit from Israel’s leading position in global innovation, its resilient economy, and its dynamic industries. ISRA tracks the BlueStar Israel Global Index (BIGI), a benchmark with over two decades of history that reflects the performance of Israeli companies listed globally.
ISRA provides investors with the opportunity to capitalize on the strength of Israel’s economy and current equity market conditions. ISRA offers diversified exposure to a wide range of sectors, including finance, technology, healthcare, and defense. Investing in Israeli companies today is not just a bet on recovery from short-term challenges but also a long-term investment in the country’s sustained leadership in cutting-edge innovation.
ISRA | VanEck Israel ETF
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Disclosure
1 PwC Israel Exit Report 2024.
2 NightDragon Fund 2024.
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and forward-looking statements, which do not reflect actual results, are valid as of the date of this communication are and subject to change without notice. Information provided by third-party sources is believed to be reliable and has not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third-party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its employees. Past performance is not indicative of future results.
An investment in VanEck Israel ETF (ISRA) may be subject to risks which include, but are not limited to, special risk considerations of investing in Israeli issuers, foreign securities, foreign currency, depositary receipts, information technology sector, financials sector, micro-, small- and medium-capitalization companies, equity securities, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified and index-related concentration risks, all of which may adversely affect the Fund. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's return. Micro-, small- and medium-capitalization companies may be subject to elevated risks.
The MarketVector BlueStar Israel Global Index® is the exclusive property and a trademark of MarketVector IndexesTM (MarketVector) and has been licensed for use for certain purposes by Van Eck Associates Corporation for VanEck Israel ETF (the "Fund") based on the MarketVector BlueStar Israel Global Index®. The Fund is not sponsored, endorsed, sold or promoted by MarketVector IndexesTM (MarketVector), and MarketVector IndexesTM (MarketVector) makes no representation regarding the advisability of trading in the Fund.
Index returns are not Fund returns and do not reflect any management fees or brokerage expenses. Certain indices may take into account withholding taxes. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses. Index returns assume that dividends have been reinvested.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
© Van Eck Securities Corporation, Distributor, a wholly-owned subsidiary of Van Eck Associates Corporation.
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Disclosure
1 PwC Israel Exit Report 2024.
2 NightDragon Fund 2024.
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and forward-looking statements, which do not reflect actual results, are valid as of the date of this communication are and subject to change without notice. Information provided by third-party sources is believed to be reliable and has not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third-party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its employees. Past performance is not indicative of future results.
An investment in VanEck Israel ETF (ISRA) may be subject to risks which include, but are not limited to, special risk considerations of investing in Israeli issuers, foreign securities, foreign currency, depositary receipts, information technology sector, financials sector, micro-, small- and medium-capitalization companies, equity securities, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified and index-related concentration risks, all of which may adversely affect the Fund. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's return. Micro-, small- and medium-capitalization companies may be subject to elevated risks.
The MarketVector BlueStar Israel Global Index® is the exclusive property and a trademark of MarketVector IndexesTM (MarketVector) and has been licensed for use for certain purposes by Van Eck Associates Corporation for VanEck Israel ETF (the "Fund") based on the MarketVector BlueStar Israel Global Index®. The Fund is not sponsored, endorsed, sold or promoted by MarketVector IndexesTM (MarketVector), and MarketVector IndexesTM (MarketVector) makes no representation regarding the advisability of trading in the Fund.
Index returns are not Fund returns and do not reflect any management fees or brokerage expenses. Certain indices may take into account withholding taxes. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses. Index returns assume that dividends have been reinvested.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
© Van Eck Securities Corporation, Distributor, a wholly-owned subsidiary of Van Eck Associates Corporation.