What works in Israel

Tactical asset allocation after tax in Israel: the rules of the Ordinary account, Study fund (IRA), in plain words with sources, and what they cost 107 strategies over 2006 to 2026.

Version: 1.0
Published: 8 October 2026
Rules last checked: 8 October 2026

Ordinary account

A flat 25% with full loss offset.

Tax cost a year (median): 2.2 pts
Median strategy, before / after tax: 8.9% / 6.8%
S&P 500 held, after tax: 9.8%
60/40 after tax (worst fall): 7.1% (-27%)

37 of 107 strategies beat a 60/40 after tax in this account with a smaller worst fall; 9 beat the S&P 500 held throughout. Returns a year, in USD.

The rules

25% on the real gain; a surtax of 3% plus 2% applies above ILS 721,560 of yearly income.
Losses offset gains of the same year and carry forward without limit.
Foreign-currency ETFs: the smaller of the dollar gain and the shekel gain is taxed (we use the dollar gain).
Israeli brokers withhold at each sale and net losses within the year.

Confidence in these rules: high. Checked 8 October 2026. Sources: Capitax (Alex Shapira law office): Capital loss from a fall in the currency rate, recognised or not?; MoneyPlan: taxation of foreign securities (two-calculation 'lower of' rule); RSM Israel: Income Tax Circular 10/2025 on capital loss offsets.

Self-managed study fund (keren hishtalmut, IRA)

Tax-free switching, for the part of your savings the ceiling lets in.

Tax cost a year (median): 0.0 pts
Median strategy, before / after tax: 8.9% / 8.9%
S&P 500 held, after tax: 11.1%
60/40 after tax (worst fall): 8.4% (-27%)

50 of 107 strategies beat a 60/40 after tax in this account with a smaller worst fall; 25 beat the S&P 500 held throughout. Returns a year, in USD.

The rules

No tax on trades inside the fund; tax-free after 6 years within the deposit ceilings.
Deposits are capped at about ILS 19,000 to 21,000 a year, so it is built up over time, not with a lump sum.
Whether leveraged ETFs are allowed depends on the managing company.

Confidence in these rules: medium. Checked 8 October 2026. Sources: TheMarker Supermarker: 2026 deposit ceilings and amounts; Harel: deposit ceilings in provident and study funds 2026 (PDF); TheMarker Supermarker: IRA study fund and provident fund, how to do it right.

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How this was computed, the limits, and every other country are in the full study.