February 20, 2012
Among all the stock markets in developed countries, guess which one produced the highest risk-adjusted returns in the last ten years? The Tel Aviv Stock Exchange. Granted, in 2011 the TASE yielded lower returns than Wall Street and European markets, but the last decade shows a different picture.
According to the Bloomberg riskless return ranking, the Tel Aviv TA-25 Index returned 7.6% in the ten years ending yesterday, after adjusting for volatility, the highest among 24 developed-nation benchmark indexes. The second-best market, with a risk-adjusted gain of 6.7%, was Hong Kong’s Hang Seng Index (HSI). Israel outperformed as it fought the Second Lebanon War against Hezbollah in 2006, the Cast Lead Operation two years later in Gaza, and is currently confronting Iran’s nuclear program.
"Israel is an exciting place to invest,” former hedge fund manager Michael Steinhardt told Bloomberg. "The country is surrounded by enemies, it’s always on the edge of extinction, but it expands and prospers.
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