In the last 12 months, the dollar rose relative to the shekel by 14% and relative to the euro by 8%.
From the beginning of 2023, the dollar rose relative to the shekel by about 4% and the euro by 3.25%.
Many are interested in what are the options for Israelis in Israel to invest in foreign currency.
In pension investments, there are routes where the funds are invested outside of Israel.
In this channel, the popular routes are those that follow the S&P500 index, which is an index that tracks the shares of the top 500 public companies in the US. These include Apple, Tesla, Amazon, Microsoft, Google, and more. There are pension asset managers that manage foreign routes that involve investment In bond indices and other stock indices from around the world. There are routes with foreign currency exposure and those without.
It is important to note that a transition between tracks in provident funds, pension funds and training funds is not a tax event even if the transition is between managers.
It is possible to purchase the currency you are interested in and keep it in your bank account.
The relatively high level of interest at the present time is causing a rethink for those who are willing to give up liquidity to make deposits in foreign currency.
A conversion fee ranging from 0.2% to 0.5% applies to the purchase of foreign currency weights. A tax of 25% will apply to the real profit in the currency in which the deposit was invested.
Another alternative is investing in dollar monetary mutual funds.
In this way, it is possible to purchase units in the fund in shekels and peg them to the dollar.
The tax on this investment will be 25%, the management fee of these funds is relatively low - around 0.2%.
Another option is investing in dollar bonds of companies traded on the Tel Aviv Stock Exchange.
They guarantee a peg to the dollar.
The risk in this channel is also the specific risk of the company that issued the bond.
Another alternative is mutual funds that invest in foreign exchange, in many cases in dollars, and among them you can find those that invest in bonds of various ratings and those that invest in stocks on various exchanges outside of Israel. These are just some of the alternatives. The help of professionals in the field can certainly have added value for investors.
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