The Tel Aviv Stock Exchange is launching TAF – Tel Aviv Funds, a new family of indices for actively managed mutual funds. For the first time in Israel, the indices will provide investors, investment advisors, and portfolio managers with a comparative tool for assessing the performance of a fund against comparable funds within the same investment category.
One of the most important needs for capital market investors is the ability to access a clear and straightforward view of the performance of the fund in which they invest relative to similar funds. Comparative tools enable investors to understand whether their fund is outperforming its relevant benchmark, how it ranks against other funds in the same investment category, and what can be learned from its performance over time. The TAF index system is designed to address this need by providing a professional, objective, and transparent reference point that will help investors and the broader public better understand fund performance and positioning relative to comparable market alternatives.
The new index system is based on TASE’s expertise in index development and follows a professional, structured methodology:
- Category segmentation: The system includes 14 fund indices, with each index reflecting the performance of mutual funds with similar characteristics. This enables investors to determine whether their fund is outperforming, matching, or lagging its category. Notably, the 14 fund indices cover approximately 77% of assets under management in the mutual fund industry.
- Index composition: Each index includes between 20 and 40 mutual funds.
- Eligibility criteria: Funds included in the indices must have a track record of at least 24 months, minimum assets of approximately NIS 30 million, and each index must include at least 20 funds.
- Ongoing updates: The index methodology will be available and transparent to the public and will be updated by TASE annually.
The active mutual fund market continues to grow rapidly. As of the end of July 2026, assets under management in these funds totalled approximately NIS 463.6 billion, an increase of approximately NIS 57.2 billion compared with 2025.
Not Only a Comparison Tool — Also an Investment Infrastructure
The TAF indices are not only a new comparison tool for evaluating the performance of actively managed mutual funds, but also an innovative infrastructure developed by TASE that enables the creation of index-tracking investment products. In this way, they offer investors a simpler and more accessible way to gain exposure to actively managed mutual funds according to each investor’s risk appetite, without the need to select a specific fund or analyse each fund individually in depth.
The retail investors do not always have the tools needed to select a specific fund, while professional advisors and portfolio managers typically serve larger clients rather than retail investors who invest relatively smaller amounts. The TAF system will therefore provide such investors with accessible, cost-free information to support informed investment decisions.
Investing through the TAF indices offers inherent advantages related to the “Star Fund” effect: it may help reduce potential investor exposure to individual fund underperformance, mitigate the impact of changes in investment managers, minimize the effect of increases in management fees, and create diversification across different investment managers who bring varied investment ideas.
Through this initiative, TASE is bringing the standards of the passive funds industry into the world of actively managed mutual funds. This move is aligned with the recent initiative by the Israel Securities Authority to allow investment portfolio managers to publish returns on managed portfolios, thereby making performance data for managed investment portfolios more accessible to the public.
The launch of the indices is part of TASE’s broader effort to expand its index families, make professional financial information and advanced analytical tools available to the retail investors free of charge, and strengthen transparency in the Israeli capital market. The data will be available on TASE’s website, in TASE's new application and thru Data vendors.
Yaniv Pagot, Executive Vice President and Head of Trading at TASE, said: “One of the key challenges in the capital market is transforming professional information into a simple, clear, and useful tool for the general public. The more tools investors have to compare, understand, and evaluate the performance of their investments against comparable alternatives, the more audiences will feel confident participating in the capital market. The launch of the TAF indices is another step in making information more accessible to all investors in Israel and in opening the market for actively managed mutual funds to investors through a professional, objective, and transparent benchmark that enables a better understanding of a fund’s performance relative to its peer group. Beyond that, the indices create an infrastructure for developing index-tracking investment products, which can enable investors to gain exposure to an entire investment category in a simpler and more accessible manner, similar to investing in equity indices. TASE will continue working to expand the range of tools, data, and indices available to the public, with the aim of strengthening transparency, facilitating informed investment decisions, and enabling more investors to participate in the Israeli capital market.”
