How to invest in Tel Aviv 125 index funds in 2024

Find out how to invest in the Tel Aviv 125 index, learn which trading platforms have the lowest fees, and what’s easiest for beginners.
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Updated: May 12, 2023
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It only takes a few minutes to invest in the Tel Aviv 125 index. One of the simplest and most popular ways to invest is to buy shares in a Vanguard Tel Aviv 125 ETF through an online trading platform.

Where can I invest in the Tel Aviv 125 index?

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According to our expert research, eToro is the best ETF broker to invest in Tel Aviv 125 index funds. 

Both Tel Aviv 125 ETFs and Tel Aviv 125 CFDs are available to invest in through eToro .

Here are three more places to buy the Tel Aviv 125, ranked according to their cost, security, and features.

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1
Min. Deposit
$ 100
Best offer
User Score
9.9
Up to $240 bonus!
Deposit with ACA, Wire, Pay with my bank
Invest for dividends and get payout on stocks on Ex-Dividend day
Start Trading
Payment Methods:
Bank Transfer, Debit Card, PayPal, Credit Card, Wire Transfer
Full Regulations:
CySEC, FCA

eToro offers real assets only, no CFD products. eToro securities trading offered by eToro USA Securities, Inc. (‘the BD”), member of FINRA and SIPC. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Invezz.com is not an affiliate and may be compensated if you access certain products or services offered by the BD.

2
Min. Deposit
$ 100
Best offer
User Score
9.9
Trade +2000 CFDs on Shares, Options, Commodities & more
Unlimited risk-free Demo Account
0 commissions & attractive spreads with up to 1:5 leverage
Start Trading
Payment Methods:
Bank Transfer, Debit Card, PayPal, Credit Card, Visa, Mastercard, American Express, Trustly, Apple Pay, Google Pay, Discover, Bank Transfer: SEPA, Bank Transfer: FPS, skrill
Full Regulations:
ASIC, FCA, FSA, MAS, CySEC #250/14

Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

3
Min. Deposit
$ 0
Best offer
User Score
9.0
Get insights from millions of investors, creators, and analysts
Build your portfolio of stocks, ETFs, and crypto–all in one place
No minimum deposit
Start Trading
Payment Methods:
Debit Card, Wire Transfer, Check, Bank Wire
Full Regulations:
Cryptocurrency execution and custody services are provided by Apex Crypto LLC (NMLS ID 1828849) through a software licensing agreement between Apex Crypto LLC and Public Crypto LLC. Crypto trading on Public platforms is served by Public Crypto LLC and offered through APEX Crypto. Please ensure that you fully understand the risks involved before trading.

How do I invest in the TA 125 index?

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The easiest way is to sign up to a stock broker, open an investment account, and buy shares in an Tel Aviv 125 ETF or CFD. This guide explains how to do it:

Step 1. Sign up to eToro

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We recommend using eToro to invest in Tel Aviv 125. Sign up for a brokerage account and deposit some money. You may need to supply a form of photo ID to verify the account.

1
Min. Deposit
$ 100
Best offer
User Score
9.9
Up to $240 bonus!
Deposit with ACA, Wire, Pay with my bank
Invest for dividends and get payout on stocks on Ex-Dividend day
Start Trading
Payment Methods:
Bank Transfer, Debit Card, PayPal, Credit Card, Wire Transfer
Full Regulations:
CySEC, FCA

eToro offers real assets only, no CFD products. eToro securities trading offered by eToro USA Securities, Inc. (‘the BD”), member of FINRA and SIPC. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Invezz.com is not an affiliate and may be compensated if you access certain products or services offered by the BD.

Step 2. Decide how to buy Tel Aviv 125

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This boils down to choosing between an Tel Aviv 125 ETF or CFD. ETFs are generally better suited to investors who want to passively track the Tel Aviv 125’s performance. CFDs offer a greater range of trading options: you can use leverage, short the index, or buy and sell it outside of trading hours.

Step 3. Invest in the Tel Aviv 125

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Sign into your trading account and search for the Tel Aviv 125. Hit the ‘buy’ button and enter the details of your purchase, such as how much you want to spend. Hit ‘buy’ again to execute the trade.

Step 4. Monitor your investment

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When you buy a CFD, the trade goes through more or less instantly, and you’ll be able to see your new open position in your trading account. ETF purchases can take longer, and if you buy outside of traditional trading hours it won’t go through until the next morning.

Your trading account will show the price change in the Tel Aviv 125 since you bought it, so you can see your profit/loss at a glance. Use that information, along with your own research, to decide when to sell the Tel Aviv 125 and close your position, ideally at a profit!

The different ways to invest in the TA 125

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As we mentioned above, there are numerous ways to put your money into the Tel Aviv 125. ETFs and CFDs are the simplest options for beginners, but there are alternatives. Here’s a brief overview of each option and who it’s best suited for.

Tel Aviv 125 ETFs

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An ETF (exchange-traded fund) is an investment fund traded on a stock exchange, much like a stock. Exchange traded funds can hold different assets, such as individual stocks, bonds, or commodities, or serve as a proxy for a stock market index.

An Tel Aviv 125 ETF is one way of investing in the Tel Aviv 125. It’s simply an investment fund that mirrors the performance of the Tel Aviv 125. When you buy shares in the fund, the value of your investment will rise or fall with the Tel Aviv 125 itself. 

ETFs are ideal for new investors because they have a very low minimum investment. You can start with a few pounds and get exposure to some of the world’s largest companies. They’re also practical if you plan on trading the Tel Aviv 125 index, because you can buy or sell shares in the fund throughout the day.

Examples of popular TA 125 ETFs

  • iShares MSCI Israel ETF (EIS)
  • BlueStar Israel Technology ETF (ITEQ)
  • ARK Israel Innovative Technology ETF (IZRL)

Tel Aviv 125 index funds

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An index or mutual fund is an investment fund that aims to track the performance of a stock market index, such as the Tel Aviv 125. It’s very similar to an ETF, in that there are low management fees and you can buy shares through your online broker.

However, there are a couple of differences. Tel Aviv 125 index funds are only priced at the end of each trading day, so you can buy or sell shares in the fund once per day. There may also be a higher barrier to entry, through a much larger minimum investment when you invest in Tel Aviv 125 index funds.

That means an Tel Aviv 125 mutual fund is better suited for long term investors with a higher initial budget, where the infrequent trading and barriers to entry are far less of an issue.

Tel Aviv 125 CFDs

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CFDs (contracts for difference) are a way to speculate on Tel Aviv 125 price changes with more flexibility than if you use an ETF or index fund. A CFD is a ‘derivative’, which means it gets its value from the underlying asset – in this case the Tel Aviv 125 – but it’s separate from it.

As a result, CFDs can be leveraged, where you borrow money to multiply the size of the trade, or they can be used to go ‘short’, where you place a trade on the index to fall in value. You can also buy and sell them outside of regular trading hours.

All of this means Tel Aviv 125 CFDs offer the potential to outperform a fund that passively tracks the Tel Aviv 125’s performance. Of course, you can also underperform it as well. Tools like leverage and shorting introduce a lot more risk, and are best left to experienced traders.

Tel Aviv 125 futures

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Futures contracts are agreements to buy or sell the TA 125 at an agreed price on a set date in the future. Tel Aviv 125 futures are a means to predict how you think the index is going to perform over a set time frame, such as the next three or six months.

Most futures contracts involve leverage, so you only put up a small part of the total trade value (the margin) when you buy one. That makes futures more risky, and they require a bit more financial expertise to understand as well.

Some traders use futures as a hedge against the performance of stocks they own. For instance, if you own stocks that are part of the Tel Aviv 125 then you might want to short the Tel Aviv 125 so that you still make some money if the price falls.

Tel Aviv 125 stocks

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Another way to invest in the Tel Aviv 125 is to buy shares in the individual stocks that the index tracks. It isn’t practical to buy every share in the index, but you can invest directly into a few of the most heavily weighted stocks in the Tel Aviv 125 in order to get broad exposure to its performance.

The most heavily weighted stocks in the Tel Aviv 125 tend to be the largest companies by market capitalisation. If you invest directly in those largest stocks, you gain exposure to the index without taking on the risk of all the underlying companies.

One reason to do this is that these larger companies with the highest market cap dominate the index anyway, so that it can give you the impression of a diversified portfolio while actually being reliant on the performance of those particular stocks.

For the Tel Aviv 125 index, the largest stocks you might choose to invest in are:

Company nameIndex weighting
Nice (NICE)4.90%
Teva Pharmaceutical Industries (TEVA)4.88%
Bank Leumi (LUMI)4.85%
Bank Hapaolim (POLI)4.75%
Israel Discount Bank (DSCT)4.59%
Tower Semiconductor (TSEM)3.87%
Ormat Techno (ORA)3.84%
Mizrahi Tefahot Bank (MZTF)3.83%
Israel Chemicals (ICL)3.75%
Elbit Systems (ESLT)3.71%

The flip side of investing directly like this is that you lose the diversification and stability that comes with buying into an entire index. It requires much more hands-on management to do your own stock picking, so it’s best suited to more experienced investors.

How much does it cost to invest in the Tel Aviv 125 index?

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From $0 to $5, depending on how you invest. For each option, you must consider the cost of buying the actual asset, whether that’s an ETF, index fund, CFD, or share, plus the fees associated with it.

InstrumentTrading feeManagement fee
Exchange traded funds$0-$5.990-0.2%
Index fund / mutual fund$0-$5.990.1-2%
Individual stock$0-$3None
CFD$0None

*A fee comparison of 3 leading brokers for example purposes

ETFs and CFDs are generally the cheapest option overall, as they have low fees and a low minimum investment. Index funds and mutual funds have low fees but may have a high minimum investment. Buying individual stocks is the most expensive option in absolute terms, because the share price of a single large company is often more than $100.

All options are likely to include a trading fee, which you pay each time you make a transaction. Some trading platforms offer zero-fee trading, with others it may be a few dollars. 

Then ETFs and index funds each have their own expense ratio. Expense ratios refer to an annual management fee, charged as a percentage of your total investment. Expense ratios are usually no more than 0.05%, so if you invest $1,000, you would pay $5 per year in management fees.

Should I invest in the Tel Aviv 125 index? 

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Yes, Tel Aviv 125 investing is a great choice if you’re looking for a safer investment with more price stability compared to picking individual stocks. It gives you an instantly diverse portfolio with exposure to a broad area of the stock market.

The flip side is that you have less control over which companies you invest in. An index committee decides how the index works, and you can’t pick and choose the underlying companies you like the most. The Tel Aviv 125 is better suited to hands-off investors, compared to those who have the skills, experience, and desire to pick their own stocks.

What are the advantages of investing in the Tel Aviv 125 index?

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An index provides instant stock market diversification, where you spread your risk across a large number of underlying companies, rather than one or two. Here are some more reasons why you might want to invest in the Tel Aviv 125 index:

  • Invest in all the top 125 listed companies in Israel. The TA 125 includes all the largest companies in Israel. Investing in the index means you get a piece of all of these companies.
  • Israel is a hub for tech, IT, and telecommunications companies. The Israel TA 125 includes many companies in high growth industries, so there’s a chance for the index to grow quicker than other indices of a similar size.
  • The TA 125 is a balanced index where no one company dominates. Indices are weighted, so the companies with the highest weighting have more of an impact on index performance. The highest-weighted company on the TA 125, Nice Ltd, makes up less than 5% of the total weighting, so it’s much more balanced than many similar indices.
  • Get started with little money. You can invest in a TA 125 ETF with just a few pounds, which is much cheaper than buying lots of individual stocks. It’s a more accessible way to start your investing journey.
  • An easy way for beginners to create their own portfolio. An index is a cheap and easy way to invest, that doesn’t require lots of time or stock picking expertise. You can instantly create a diversified portfolio of stocks without requiring hours of research time.

What are the disadvantages of investing in the Tel Aviv 125 index?

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The main risk of investing in the Tel Aviv 125 is that all the underlying companies are related in some way, so a broader economic downturn that affected the entire country would likely affect many stocks in the index at the same time. Here are some more risks of Tel Aviv 125 investing.

  • All the stocks can be affected by the same issues. The danger of an index like the TA 125 is that all the stocks are geographically related. Any issue that affects the Israeli economy is likely to affect all the stocks on the index. So while the stocks may be from diverse industries, they don’t offer protection from country-wide volatility.
  • You can’t outperform the market when you invest in an index. A stock market index like the TA 125 is a benchmark by which you can judge investor performance. By investing in the TA 125 yourself, you can’t outperform the benchmark, only match it.
Invest in the TA 125 index

FAQs

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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.