Tel Aviv 35 Index and Its Impact on the Israeli Market

The Tel Aviv 35 Index is the leading index on the Tel Aviv Stock Exchange and includes the 35 largest companies by market capitalization that meet the index’s eligibility criteria This index serves as a key indicator of the performance of the Israeli market and is an important tool for both individual and institutional investors It reflects the central economic trends in the country and influences economic decision-making at various levels

The index was launched in January 1992 with an initial value of 100 points Over the years the index has undergone several significant updates the most notable being the expansion from 25 to 35 stocks in 2017 aimed at increasing stability and reducing the volatility typical of smaller indices These changes also reflect the economic development of Israel and the transition of the Israeli market from a limited market to a broader index accessible to more investors

Index Performance in 2025

As of September 2025 the Tel Aviv 35 Index has recorded an impressive positive return of approximately 27.23% year-to-date This performance reflects the stability of the local market and the positive results of the largest companies listed on the Tel Aviv Stock Exchange The increase in return is due to several key factors including positive performance in the banking and finance sector with major banks such as Bank Hapoalim and Bank Leumi benefiting from increased profitability and financial stability successes in the technology and high-tech sector with companies like Mobileye and NICE Systems showing remarkable growth driven by innovation and global demand for technological products relatively low volatility in the energy sector with stable energy prices contributing to company stability and the strengthening of the real estate market with high demand for residential and commercial spaces contributing to positive performance of real estate companies in the index

Index Composition Who is Included and Who is Not

The index composition changes periodically according to changes in the market capitalization of listed companies The index is divided into several major sectors with each sector affecting index volatility differently The current composition includes a variety of leading companies in different fields each bringing a unique impact to the index allowing investors to gain a broad and precise overview of the Israeli market

Banking and Finance

Companies in the banking sector represent a significant part of the index and provide relative stability even during periods of market volatility Key stocks in this sector include Bank Hapoalim POLI which is the largest bank in Israel by assets and Bank Leumi LUMI which serves as a stable anchor for investors seeking financial stability in addition Discount Bank DSCT and Mizrahi Tefahot Bank MZTF provide additional diversification in the financial sector Banks in the index also serve as an indicator of the Israeli economy’s resilience to financial crises and their impact on the index is particularly evident during periods of instability in local and global markets

Technology and High-Tech

The high-tech sector is the growth and innovation engine of the index Leading stocks in this sector include Mobileye MBLY which leads in advanced driver-assistance systems and NICE Systems NICE providing software solutions for customer relationship management Additional companies such as Sapiens SPNS and Nova Measuring Instruments NVMI offer exposure to software technologies and financial services This sector tends to be more volatile due to global trends technological developments and international competition High-tech stocks offer high return potential for investors willing to take risks but also require careful monitoring of financial reports company updates and the impact of local and international regulations

Energy and Resources

The energy and resources sector provides important diversification to the index and reflects the Israeli market’s exposure to global commodity prices Leading companies in this sector include Delek Drilling DLEKG involved in gas and oil exploration and Ratio RATI providing geographic exposure and diversification in the energy market Investing in energy stocks adds an element of risk and return to the index depending on global oil gas and commodity prices making the energy sector an important tool for investors seeking exposure to global economic trends

Real Estate

The real estate sector in the Tel Aviv 35 Index provides stability and regular dividend returns Leading companies include Azorim AZRG representing residential and commercial real estate in Israel and Alony Hetz ALH operating income-generating real estate with international investments additionally Gav Yam GAV provides significant presence in residential and commercial real estate Real estate in the index offers important diversification for investors reducing overall portfolio risk In addition real estate stocks also reflect macroeconomic trends such as housing prices demand for commercial space and interest rate effects on the market

Consumption and Leisure

The consumption and leisure sector reflects local consumption in the country and includes companies with relatively stable revenues Leading stocks include Strauss STRS the Israeli food giant and Teva TEVA operating in pharmaceuticals in addition EL AL the national airline is affected by fuel prices and global trends This sector provides stable and varied returns reflecting local consumption trends and allowing investors to gain a broader picture of economic activity in Israel

How the Index Affects Investors

The index provides diversification and risk reduction by offering exposure to 35 leading stocks across more than ten different industries providing broad diversification that reduces specific risk to any single stock The index is based on high market capitalization and liquidity stocks making it easier for investors to execute transactions quickly and cost-effectively The index also serves as a basis for financial products such as ETFs allowing convenient exposure to the entire market for both beginner and institutional investors The largest stocks in the index such as Mobileye and Bank Hapoalim have the most influence on index volatility Investors should understand that index returns are significantly influenced by the largest stocks even though smaller stocks add value they do not change the overall trend

Numerical Analysis of the Index

Number of stocks in the index 35 Main sectors Banking and finance ~30% Technology ~25% Energy ~15% Real estate ~15% Consumption ~15% The current index value can be tracked on the Tel Aviv Stock Exchange website market.tase.co.il This analysis highlights the importance of sector weighting on index performance allowing investors to understand the potential impact of trends in the energy real estate or technology sectors on returns Additionally the sector distribution in the index reflects economic shifts in the country allowing in-depth analysis of risks and returns for each sector and their impact on investors

Conclusion and Recommendations

The Tel Aviv 35 Index is a key tool for understanding the Israeli market encompassing the largest and most influential companies on the exchange Investors can use the index as a direct investment via ETFs as a tool for monitoring market trends and analyzing sector risks and returns The index provides diversification liquidity and exposure to leading companies in Israel making it an important tool for any investor seeking to understand the local market The Tel Aviv 35 Index combines stability with high growth potential and provides a clear framework for analyzing the Israeli market and its leading sectors.