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
The Israeli share market rallied strongly in June, with the TA-125 Index rising nearly 11%. The surge followed a major shift in geopolitical dynamics. On 13 June, Israel launched strikes on Iranian military and nuclear assets, followed by coordinated US airstrikes using bunker-buster munitions. While the initial response raised concerns of escalation, markets ultimately interpreted the actions as a long-term de-risking event. The shekel appreciated by around 8% from mid-June, bond prices rose, and Israel’s 5-year CDS spread narrowed to 85 basis points.
Macroeconomic data continued to support sentiment. High-tech service exports rose at a 16% annualised pace in the February to April period. Capital raised by tech firms reached US$2.7 billion in the second quarter, up 71% on the prior year. Infrastructure and energy exports remained key contributors to growth and external balances.
Inflation expectations eased on the back of lower oil prices and the stronger shekel. The June CPI is expected to rise just 0.4%, lowering annual inflation to 3.1%. The 12-month forecast has declined to 2.3%. The Bank of Israel held rates steady but retained a cautious tone. Markets now expect the policy rate to fall to around 3.75% over the next year.
Strategically, Israel’s strengthened security posture is expected to support sovereign credit ratings and attract greater investment. The prospective expansion of the Abraham Accords, a series of normalisation agreements between Israel and several Arab nations, may further unlock trade and energy flows. Confidence in the innovation sector was reinforced by Nvidia’s decision to build a 29-acre R&D campus in Israel, its largest outside the United States.
Portfolio Commentary
The Fund performed strongly in June, with positive contributions across all major sectors. Early in the month, the investment team increased exposure to energy and defence names in response to the unfolding geopolitical events. Positions in Navitas Petroleum, an oil and gas exploration and production company, and Delek Group, a diversified energy and infrastructure business, were initiated to capture rising commodity prices and sentiment around regional energy security. The Fund also added to NextVision, a developer of miniature stabilised imaging systems used in defence and surveillance, which benefitted from heightened demand for tactical technology solutions.
These positions were rotated later in the month into income-producing real estate and renewable energy holdings. The portfolio added to Alony Hetz, a diversified real estate investment group, which rose 17% following a return to profitability and improved investor appetite for yield-sensitive assets. Inrom, a supplier of construction and building materials, also contributed, gaining nearly 20% amid renewed activity in residential development and infrastructure investment. Bond yields declined through June, creating a supportive environment for both sectors.
Exposure to semiconductors was increased through Camtek, a manufacturer of metrology and inspection systems for chip production, and Qualitau, a provider of reliability testing equipment for the semiconductor industry. Qualitau rose 31% in June, supported by a recently announced share buyback and strong quarterly results. The company remains debt-free and well positioned to benefit from continued investment in AI infrastructure.
Financials also delivered strong returns. Bank Hapoalim, a leading Israeli commercial bank, rose 23% following strong quarterly earnings and increased trading activity, with the stock benefitting from positive technical momentum in the second half of the month. Bank Leumi, one of Israel’s largest financial institutions, gained 11% as investor confidence remained high after its May results and continued capital return initiatives. Clal Insurance, a diversified insurance and investment group, rose 35% after reporting solid earnings growth and declaring a mid-June dividend. The payout ratio remained conservative at 12%, reinforcing confidence in the company’s capital position. Sector-wide tailwinds, improved investment income, and stronger technical signals supported the rally.
The Fund continues to focus on companies with resilient earnings, strong competitive positions, and diversified international operations, providing a solid foundation for long-term returns.