i.Net performance figures are shown after all fees and expenses, and assume reinvestment of distributions. Performance figures are calculated using net asset values after all fees and expenses, and assume reinvestment of distributions. Index returns shown are in ILS (Israeli Shekel). No allowance has been made for buy/sell spreads. Please refer to the PDS for information regarding risks. Past performance is not a reliable indicator of future performance and may not be repeated, the value of investments can go up and down.
^. Inception 1st January 2018.
* Performance for periods greater than 12 months are annualised. Net performance figures are shown after all fees and expenses, and assume reinvestment of distributions. No allowance has been made for buy/sell spreads. Past performance is not a reliable indicator of future performance, the value of investments can go up and down.
1. Inception date 1 January 2018. Performance shown is the continuous performance of both the current and previous strategies.
2. Prior to February 2025 performance has been simulated by Pengana from the monthly gross returns of the Alpha Long Equities Fund denominated in ILS. The simulation was done by: hedging currency exposure of the underlying strategy to the base currency of the stated class using three month forward rates; and, applying the fee structure of the stated class. From February 2025 inclusive, performance is of the Pengana Alpha Israel Fund.
3. Index returns shown are in ILS (Israeli Shekel).
Please note: This fund is only open to Wholesale Investors.
COMMENTARY
Market Review
Israeli equities posted broad declines in March against a backdrop of significant global market weakness and heightened regional tensions. The TA-125 Index fell 1.4% during the month, while mid-cap stocks underperformed more sharply. The banking sector recorded the steepest losses, bearing the brunt of risk repricing, while technology and gas stocks showed relative resilience with modest gains.
Global equity markets experienced a pronounced selloff, compounded by a sharp surge in oil prices as the Iran conflict disrupted energy flows through the Strait of Hormuz. US equities declined sharply, while European and Australian markets saw even steeper falls. Against this backdrop, the Israeli market entered April among the better-performing equity markets globally in early 2026.
The month was defined by a major escalation in the conflict between the US and Israel against Iran, following coordinated strikes on Iranian military and nuclear targets at the end of February. Iran responded with sustained missile and drone attacks across the region, and the conflict expanded into a multi-front confrontation involving Iranian proxies across military, cyber, and economic domains. By early April, a temporary ceasefire had been reached with Iran, though the broader regional situation remains fragile.
The Bank of Israel held interest rates steady at 4.0%, citing intensified inflation risks driven in part by surging energy prices. Despite this, the Bank’s Research Department continues to project one to two rate cuts over the coming year. Inflation expectations remain contained at approximately 2.30%, and the Israeli economy has shown resilience during the conflict.
Portfolio Commentary
The Fund underperformed in March, with concentrated exposure to holdings that reported during the month amplifying the impact of individual results on overall performance. Strong contributions from two holdings were more than offset by a sharp decline in a third following disappointing earnings.
The largest contributor was Telsys, an electronics distribution and embedded computing group, which rose 18% after reporting excellent results. It signalled a return to double-digit growth in its System-on-Module activity through its subsidiary Variscite, while maintaining operating margins of approximately 50%. For the first time in two years, the forward order backlog increased meaningfully, providing strong near-term visibility.
Nayax, a cashless payment solutions provider, gained 13% after reporting continued operational progress. Revenue per user grew at a double-digit rate alongside a significant increase in net profit. The team believes the current year may represent a turning point, following a bond issuance of approximately USD 350 million intended to support synergistic acquisitions and projected revenue growth approaching 30%.
During the month, the Fund partially shifted its Nayax position into options to maintain upside exposure while reducing overall volatility.
The main detractor was Qualitau, a semiconductor reliability testing equipment provider, which declined 23% after reporting disappointing annual results. Rather than any deterioration in the underlying business, the shortfall was driven by timing shifts of deliveries between the third and fourth quarters, as well as one-off items.
During the quarter, the Fund led a capital raise of approximately USD 70 million alongside leading institutional investors, at a discount and with attached warrants. This reflects the team’s conviction in the long-term opportunity. Encouragingly, the share price has since recovered strongly into April. Qualitau maintains a strong forward backlog with good visibility, and the team expects increased transparency from management to help restore investor confidence.
Taking a longer-term view, the team believes a favourable resolution to the current conflict could represent a structural positive for Israel. A reduction in the country’s geopolitical risk premium, accelerating regional economic integration, and increased foreign investment could all follow as uncertainty declines. The portfolio remains well positioned to benefit from these tailwinds as they materialise.