A nearly 65% rally positions this insurance ETF as one of the top-performing assets of the year

Israel’s capital markets have delivered strong momentum in 2025, but few instruments have captured investor attention like TAINSURANCEPLUS – an exchange-traded fund (ETF) tracking the Tel Aviv Insurance & Financial Services Index. Between January and the end of June 2025, the ETF surged by approximately 64.7%, making it one of the best-performing investment vehicles on the Tel Aviv Stock Exchange (TASE) this year.

The daily chart shows a clear uptrend, characterized by technical breakouts, movement above all major moving averages, and growing trading volume. This is not just a case of short-term momentum – it’s a well-structured upward trajectory, supported by strong fundamentals and a favorable macroeconomic environment.

What’s driving the rally? Strong earnings, macro trends, and renewed investor sentiment

Behind this powerful move lies a combination of structural forces:

First, leading insurance companies such as Phoenix, Clal Insurance, Migdal, Menora Mivtachim, and Harel delivered strong Q1 earnings reports, with standout gains from both core insurance operations and investment portfolios. In particular, higher yields on government bonds and managed assets significantly boosted profitability.

Second, the current interest rate environment in Israel – relatively high, but stabilizing – favors the insurance sector. While commercial banks are starting to feel pressure from margin compression and future rate cuts, insurers continue to benefit from strong fixed-income returns without taking excessive credit risk.

Third, the insurance industry is benefiting from improved public perception. Digital transformation, greater service transparency, and operational efficiency have helped reduce customer churn and increase satisfaction – two key factors driving institutional inflows into the sector.

What does TAINSURANCEPLUS include?

TAINSURANCEPLUS tracks the TA Insurance Plus Index, composed of Israel’s leading insurance firms. Constituents are weighted by free-float market capitalization with a cap on single-stock exposure, ensuring diversified representation.

Core holdings include the major listed insurers mentioned above, as well as smaller players such as Libra Insurance and companies involved in pensions, long-term savings, and financial advisory. By investing in this ETF, participants gain targeted exposure to the financial insurance space, without unnecessary sector overlap with real estate, industrials, or tech.

Technically sound: A breakout backed by volume

The ETF’s chart pattern indicates strong technical momentum. Since March, price action has steadily moved above the 21-day and 50-day exponential moving averages, with each pullback quickly met by buyers. In June, the ETF broke through a key resistance level, followed by significant volume expansion – a classic signal of institutional accumulation.

MACD and RSI indicators show consistent bullish confirmation, with no major divergences or weakness. As long as the price remains above short- and mid-term averages, technical analysts see room for continued upside.

Strategic advantages for investors

TAINSURANCEPLUS presents a compelling opportunity for both passive and active investors, thanks to several structural advantages:

Focus on a defensive, high-cash-flow sector that performs well during periods of macro uncertainty.

Strong regulatory clarity, with Israel’s securities authority enforcing robust transparency standards.

High relative liquidity, compared to niche sector ETFs.

Attractive balance between capital appreciation and dividend yield, suitable for long-term holdings.

The ETF suits both retail investors seeking concentrated exposure to a stable financial segment, and institutional managers looking to balance equity portfolios with non-bank financials that are currently outperforming.

Looking ahead: Can the rally continue?

With a six-month rally already in place, many are asking whether TAINSURANCEPLUS still has room to climb. From a fundamental perspective, there is no immediate sign of exhaustion. Q2 earnings are expected to remain strong, reflecting rising investment income and underwriting stability. Meanwhile, inflation in Israel remains relatively contained, and bond yields remain supportive.

If the Bank of Israel begins cutting rates in the second half of 2025 – as some economists anticipate – it could trigger renewed interest in financial stocks, and specifically insurance names that continue to benefit from favorable duration spreads and solid actuarial margins.

On the risk side, potential headwinds could include regulatory intervention, pricing controls on pension products, or geopolitical instability. But barring a major external shock, the sector’s fundamentals remain solid.

Conclusion: A sector ETF that’s proving its strength

TAINSURANCEPLUS has clearly established itself as a standout performer in 2025. The ETF reflects a rare convergence of factors: strong corporate earnings, a favorable policy environment, robust technical support, and renewed investor confidence in the insurance space.

Whether this is a short-term move or the start of a multi-year cycle remains to be seen. But for now, TAINSURANCEPLUS is an ETF that’s worth watching, both for its performance and for what it tells us about investor sentiment toward Israel’s evolving financial sector.