The Next-Generation Israeli investors are reshaping the market
Israel’s capital market is no longer the domain of traditional banks alone. A new generation of investors, primarily aged 18–30, is entering the scene with a different mindset, different habits, and a growing influence on how money is invested. One striking trend is that roughly half of new trading accounts are opened at brokerage houses rather than banks, signaling a broader shift in how young Israelis prefer to access markets.
A demographic shift with real consequences
Data from the industry and recent market research show a distinct shift in who is trading and how they behave. Active investors aged 18–29 account for about a quarter of the market’s active traders, while the share of younger participants among those who manage their portfolios themselves is even higher. In practice, young investors are driving demand for lower-cost trading, user-friendly platforms, and access to global markets—often with a focus on U.S. equities and technology giants.
The trend isn’t limited to a single bank or brokerage. Brokers report that young entrants often begin their journey with simpler products but progressively diversify as they gain experience. In contrast, banks continue to push on-campus and loyalty-oriented campaigns to retain the next wave of retail traders, but many young clients are increasingly choosing brokerages for lower fees and broader access.
What they’re buying—and why the S&P 500 matters
Among the products capturing the attention of young investors, the S&P 500 has been a gateway. Israeli savers and traders shifted from traditional savings into equity-linked funds and index trackers, with assets in S&P 500-related vehicles swelling substantially over the past few years. What starts as a focus on the U.S. benchmark often evolves into broader diversification: Nasdaq-linked funds, global equity indices, and local Tel Aviv-listed ETFs tracking regional banks or insurance indices are increasingly common.
For many, the S&P 500 is the entry point rather than the destination. Investors mature by building a broader portfolio that can include ETFs tracking global indices and sector-specific funds, gradually adding local equities as they gain confidence. This progression mirrors a broader financial education trajectory—from passive exposure to more active choices and diversification across markets.
Three market scenarios and why Israel may win in all of them
Analysts describe three possible trajectories for the markets, yet each scenario presents opportunities for Israeli investors. A more favorable domestic economic environment could boost local equities, while continued global growth could lift portfolios through international exposure. In all cases, younger investors’ appetite for low-cost access, education, and diversification positions Israel to benefit as capital flows expand beyond traditional channels. The acceleration of participation by the 18–30 demographic acts as a catalyst for both brokers and banks to adapt product offerings and pricing to a more demanding, tech-savvy client base.
Stories from the ground: young investors tell the tale
Real-world examples illustrate the practical impact. A 25-year-old student and aspiring teacher, for instance, built a growth-oriented portfolio with a core U.S. exposure via an ETF like QQQ, paired with additional funds targeting banks and semiconductors. The result is a balancing act between education, risk, and long-term wealth creation.
Another young professional, who recently began investing alongside a partner, demonstrates how grants and future earnings can be directed toward building a home and financial security. These narratives highlight a broader trend: disciplined, informed, and gradual accumulation of wealth through equities rather than waiting for the perfect opportunity.
Implications for banks, brokerages, and aspiring investors
Despite the surge in young, self-directed trading, the majority of Israeli trading still occurs via banks. In the first half of 2025, the five largest banks together earned substantial securities commissions, underscoring the ongoing profitability of traditional channels. Yet the competitive landscape is shifting: brokerages are competing on fees, accessibility, and education—factors that resonate with young investors who are cost-conscious and value-informed.
For policymakers and market participants, the takeaway is clear. A large portion of the population—about 34% of assets—is still held in cash or bank deposits, suggesting a large growth runway for investment literacy and product innovation. As more young people join the market and seek efficiency, the market could become more dynamic, with greater demand for cost-effective trading, fractional investing, and accessible education resources.
Practical guidance for the new generation of investors
If you are part of the 18–30 cohort stepping into the market, consider a staged approach: start with broad-market ETFs to gain exposure and learn, then gradually add U.S. and global equities as you become comfortable. Prioritize low fees, tax-efficient vehicles, and diversification across sectors and geographies. Leverage educational resources from reputable brokers and stay disciplined during market dips—the data suggests the young generation has both the curiosity and resilience to navigate volatility with patience and perspective.
Conclusion: a new era with enduring implications
The emergence of a next-generation Israeli investor is reshaping the market’s structure and behavior. While banks retain a significant stake, brokerages are closing the gap by offering lower costs and greater access to global markets. As young investors learn, adapt, and grow, their impact on prices, liquidity, and product design will likely intensify, signaling a longer-term shift toward a more inclusive, educated, and competitive market landscape.
