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Migdal Capital Markets becomes first investment house to track new green index

Giving institutional investors an environmentally conscious option, exchange traded fund will track the Tel Aviv Stock Exchange TA-125 Fossil Free index

Sue Surkes is The Times of Israel's environment reporter.

The Tel Aviv Stock Exchange, December 25, 2018. (Adam Shuldman/Flash90)
The Tel Aviv Stock Exchange, December 25, 2018. (Adam Shuldman/Flash90)

Migdal Capital Markets on Sunday became the first investment house to launch an exchange traded fund (ETF) that tracks the Tel Aviv Stock Exchange’s TA-125 Fossil Free index.

The index, launched in December, is a green version of the veteran TA-125 index, with the same shares, bar those of corporations involved in any stage of the production and marketing of fossil fuels. It comprises 107 shares with a market cap of NIS 660 billion ($203 billion) and a float value of NIS 450 billion ($138.5 billion).

The list of “dirty” companies is determined by the Indices’ Committee of the Clean Money Forum within the Life and Environment not-for-profit organization. Life and Environment is an umbrella body for Israel’s environmental groups.

The Clean Money Forum joined the management of Migdal Capital Markets on Sunday to celebrate the ETF launch.

The hope is that large institutional investors will start to divert their money from fossil fuel companies into greener options.

From right to left: Yaniv Hirsch, Amit Rachmani (Indices Unit, Tel-Aviv Stock Exchange); Roni Neumann (Home Guardians); Roy Mimran (Chairman, Israel Forum for Pension Savings); Adv. Orly Aharoni, (Chairwoman,  Climate Investments Index Committee of the Clean Money Forum); Oren Kaplun (Fossil Free Israel). (Sivan Farag)

Migdal itself has pledged to go 100% fossil free by 2030.

Israel Eliyahu, chairman of Migdal Capital Markets, said, “This listing is a first and important step for the local market in the global journey towards socially responsible investing. Raising awareness about this issue among all decision makers, including public institutions, is of the utmost importance.”

Orly Aharoni, chairperson of the Climate Indices and Investments Committee of the Clean Money Forum, said: “In 2021, we all realize that the climate crisis requires us to take a new direction and the key role of the financial arena in this process is globally acknowledged. Investments in fossil fuels are being redirected at growing rates, and even discontinued. This index presents an opportunity for the financial sector and investors in Israel to show leadership by refraining from harmful investments, and at the same time maximizing their profits.”

Yaniv Hirsch, indices marketing manager in TASE’s Trading Department, said, “We are excited about the launch of the first ETF on this index which enables investors to make a conscientious investment choice. We look forward to seeing more products on TASE’s green indices segment, which will open up a wide array of responsible investment choices for the public, in line with global trends. TASE, as the home of the Israeli economy, encourages and welcomes renewable energy and green companies for a future that is free of fossil fuels, for the benefit of our and our children’s wellbeing.”

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