The Rise of the Next-Gen Investor in Israel
Israel’s stock market is in the midst of a quiet revolution. A new generation, aged 18 to 30, is stepping onto the trading floor with a different playbook than the one that dominated the pre‑Corona era: fewer big bank monopolies, more brokerages, and a global mindset. The most telling sign is practical: half of all newly opened trading accounts are now at brokerage firms, not traditional banks. This shift points to a broader reordering of where and how young people invest, a trend that’s reshaping strategy, risk tolerance, and exposure to international markets.
Promotions and policy shifts aimed at younger clients have become a clear signal. In the case of Bank Hapoalim, customers received gifts of two Worley shares (worth about 120 shekels) to hold via the bank’s trading account, signaling a bid to win a growing slice of a market that’s increasingly defined by brokerage platforms. Yet the numbers behind the gesture tell a more nuanced story: the average age of customers who chose the share gift tops the chart at around 46, with a wide spread from 18 to over 100. This suggests that while some youngsters are drawn to specific incentives, many prefer to diversify beyond the bank’s walls, often leaning toward U.S. equities or independent portfolios outside the traditional banking framework.
From Banks to Brokerages: The Structural Shift
Beyond promotional deals, a broader structural shift is under way. The Israeli market is seeing a deliberate tilt toward lower-cost, more flexible trading models. Bank Leumi’s sibling move to offer young investors (18-30) a complete management-fee exemption on portfolios up to 200,000 shekels, along with fixed-commission trading and favorable terms for international trading, illustrates a direct response to the appeal of brokerages. These incentives make it financially viable for young traders to build and manage portfolios outside the traditional banking system. The effect is a younger, more self-directed user base that values autonomy and cost efficiency as much as potential upside.
Evidence in the Data: What the Numbers Show
A stock exchange study published earlier this year confirms that the impulse to invest among Israelis is being driven by the younger cohort. The 2024 survey, conducted by Shiluv for IPANEL, found that the average starting age for investing sits around 30, with young people who manage their own portfolios tending to be even younger—around 29. The share of active investors aged 18-29 stands at about 23%, while those aged 50+ account for roughly 40%; the remaining investors fall into the 30-49 range. Urban centers and higher education correlate with more active participation, underscoring a demographic that blends knowledge with risk appetite.
Brokerage-led data align with this: ONE ZERO, the country’s first digital bank, reports that about 28% of its traders are 30 or younger. Investment houses like IBI show even starker preferences for youth: roughly 40% of stock traders are under 30, with a steady flow of young clients moving their portfolios out of banks and toward independent platforms. This rising young cohort tends to favor U.S. technology and growth plays, looking for long‑term growth while maintaining a readiness to ride volatility—an attribute often sharpened by exposure to global markets and online education resources.
The S&P 500 as a Launchpad
For many Israeli youths, the journey begins with broad exposure to the S&P 500. In recent years, assets tracking the U.S. index have surged from under 20 billion shekels to over 250 billion, reflecting a cultural shift toward international diversification. The pattern often starts with U.S. large-cap exposure and gradually expands to Nasdaq and global indices. In the past year, Israeli markets delivered notable outperformance relative to many global peers, with the TA-35 climbing roughly 50% while the S&P 500 rose about 16%. The result is a rising appetite for homegrown products—local ETFs that track Israeli banks and insurance sectors attract new investors who seek a domestic anchor after gaining comfort with international exposure.
Real Voices: Young Investors Share Their Paths
Stories of individual journeys illustrate the broader trend. A 25-year-old from Ness Ziona, studying and teaching, built a stock‑heavy portfolio anchored in a U.S. growth-centric allocation (QQQ) alongside U.S. banks and chipmakers. He emphasizes stability and learn‑by‑doing, leveraging low-cost index exposure to balance risk with room for educational growth. Another story comes from a 27-year-old social worker in a southern city who leveraged government grants and a broadened literature base to invest with his partner, ultimately turning a modest windfall into a foundation for a first apartment. These narratives reflect a generation that combines practical discipline with a willingness to embrace global ideas and local opportunities alike.
The Path Forward: Opportunities and Risks
Despite this surge in youth-driven investment, the banking sector still commands a dominant role in the market—about 75% of accounts are managed through banks. Trading fees from stocks remain a substantial revenue stream for banks, with the first half of 2025 showing a notable increase in equity commissions across the big five banks. For policymakers and industry players, the challenge is twofold: accommodate a growing, more tech-savvy investor base while ensuring financial literacy and prudent risk management. On the plus side, a younger, more engaged electorate of investors can deepen liquidity, broaden the base of domestic savings, and stimulate innovation in financial products, including domestic ETFs tied to the Tel Aviv indices and international benchmarks.
Bottom Line
The next generation of Israeli investors is not merely a demographic blip. It’s a structural shift toward brokerage-driven participation, a broader embrace of global markets, and a long-run potential to elevate the country’s financial ecosystem. As youth-led demand reshapes pricing, services, and education, both banks and brokerages must adapt to a market where knowledge, low costs, and international exposure define success.
