The Israeli Stock Market's Surprising Stability

It surpasses all peers when adjusted for volatility

Israel, under threat of war from its neighbors since its founding in 1948, produced better risk-adjusted returns than all other developed stock markets in the past decade. The country’s main stock index, the Tel Aviv TA-25, returned 161 percent, including dividends, over the 10 years through Feb. 17, the third-best performance among developed markets after Norway’s OBX Index and Hong Kong’s Hang Seng. After adjusting for market volatility, Israel came out on top among the 24 developed nations, with a 7.6 percent risk-adjusted return. Hong Kong was second at 6.7 percent, Norway third at 6.5 percent.

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