Main Bond Indices

1. Purpose of Bond Indices

Indices are statistical measures reflecting changes in the securities market. The index is essentially an imaginary portfolio of a select group of securities, reflecting their average price level. Change in an index represents a change in value of the investment for better (profit) or worse (loss).  Indices serve as benchmarks for the performance of investment funds and portfolio managers, as well as an underlying asset for financial products such as: Options, Futures, Index Linked Notes and Reverse Certificates.

The TASE computes and disseminates several securities indices that are composed and based on criteria including market capitalization, sector, and dividend yield. The TASE calculates and publishes the main indices continuously throughout the trading day, every 15 seconds (“continuous indices”). (Other indices are calculated and published only at the end of the trading day.)
The Indices methodology is handled by the TASE in cooperation with the Israeli Central Bureau of Statistics.

2. General

(a) All Bonds: The General Bonds Index includes all government bonds and corporate bonds traded on the exchange. The return was 16.4% in 2009 and 14.9% in 2010.

(b) CPI-Linked Bonds: The CPI-Linked Bonds Index includes all the government bonds and corporate bonds linked to the consumer price index that are traded on the exchange.

(c) Currency-Linked Bonds: The Currency-Linked Bonds Index includes all the government bonds and corporate bonds linked to the foreign currencies that are traded on the exchange.

3. Government bonds

(a) Government Bonds: The Government Bonds, General Index includes all the government bonds traded on the exchange.

(b) CPI Linked Government Bond: The Government Bonds, CPI-Linked Index includes all the government bonds linked to the consumer price index that are traded on the exchange. This index has three sub-indices, based on their time to maturity: 0-2 years, 2-5 years, and 5-10 years. As of March 1, 2010, the sub-indices, 5-7 and 7-10, were merged to the 5-10 Index. The return was 11.1% in 2009 and 14.9% in 2010.

(c) Non-Linked Government Bonds: The Government Bonds, Non-Linked Index includes all the government bonds that are not linked to the CPI or currency traded on the exchange. The return was 3.3% in 2009 and 11.7% in 2010.

(d) Short Term Treasury Bill: The Short Term Treasury Bill Index, known as Makams, includes all such certificates listed on the exchange.

(e) Non-Linked, Fixed Interest, Gov. Bonds: The Government Bonds, Non-Linked Fixed Rate Index includes all non-linked government bonds paying fixed interest that are listed on the exchange. This index has three sub-sectors, based on their time to maturity: 0-2 years, 2-5 years, and more than 5 years.

4. Corporate bonds

(a) Tel-Bond 20: The Tel-Bond 20 Index was launched in February 2007. It consists of the 20 corporate bonds, fixed-interest and CPI-linked, with the highest market capitalization among all the bonds traded on the Tel Aviv Stock Exchange. The return was 22.5% in 2009 and 18.2% in 2010.

1. The bonds must bear an investment grade of at least (A-) by Maalot, or (A3) by Midroog. If both rating agencies cover the bond, the lower of their ratings will prevail for the purposes of the Index prerequisites.
2. The bond series must have a market cap of at least NIS 250 million.
3. The minimal maturity must be at least one year and a half.
4. The maximal maturity, at the record date, may be no more than 30 years.
5. Trade Turnover: The bond must be among the 75 bonds with the highest trade turnover among the CPI-linked corporate bonds bearing fixed interest that are traded on the TASE.

(b) Tel-Bond 40: The Tel-Bond 40 Index was launched in February 2008. It consists of the 40 corporate bonds, fixed-interest and CPI-linked, with the highest market capitalization among all the bonds traded on the Tel Aviv Stock Exchange that are not included in the Tel-Bond 20.

(c)  Tel-Bond 60: The Tel-Bond 60 Index was launched in February 2008. It consists of the 60 corporate bonds, fixed-interest and CPI-linked, with the highest market capitalization among all the bonds traded on the Tel Aviv Stock Exchange. It includes the Tel-Bond 20 and Tel Bond 40.

(d) Tel-Bond Shekel: The Tel-Bond Shekel Index was launched in December 2009. It consists of all the corporate bonds, with fixed-interest, that meet the index Criteria.

(e) Non-Government Bonds: The Corporate Bonds, General Index includes all the corporate bonds traded on the exchange.

(f)  CPI- Linked non-Government Bonds: - The Corporate Bonds, CPI-Linked Index includes all the corporate bonds linked to the consumer price index that are traded on the exchange. The return was 41.2% in 2009 and 20.2% in 2010.

Israel in Global Bond Indexes

Coming Soon

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