<div id="readability-page-1"><div id="blog-content"><img height="334" src="https://imageproxy.pbkrs.com/https://images.unsplash.com/photo-1569025690938-a00729c9e1f9/query-YXV0bz1mb3JtYXQmZml0PWNyb3AmaXhpZD1leUpoY0hCZmFXUWlPakV5TURkOSZpeGxpYj1yYi0xLjIuMSZxPTgwJnc9MTAwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="500" original-src="https://imageproxy.pbkrs.com/https://images.unsplash.com/photo-1569025690938-a00729c9e1f9/query-YXV0bz1mb3JtYXQmZml0PWNyb3AmaXhpZD1leUpoY0hCZmFXUWlPakV5TURkOSZpeGxpYj1yYi0xLjIuMSZxPTgwJnc9MTAwMA"/>Image Source: Unsplash Over extended market cycles, Israel’s mid-cap equities have often delivered strong growth, driven by their greater sensitivity to domestic economic trends. Despite this, mid-cap companies remain underrepresented in many portfolios. The S&amp;P Israel 70 MidCap Index addresses this gap, systematically measuring the mid-cap segment and offering a diversified look at established Israeli mid-cap companies through a transparent, rules-based framework.<h3> A Rules-Based Approach to Israel’s Mid-Cap Segment</h3>The S&amp;P Israel 70 MidCap Index is derived from the broader S&amp;P Israel 100 Index, which includes the 100 largest and most liquid stocks listed and domiciled in Israel. Constituents are selected based on a combined ranking of float-adjusted market capitalization (FMC) and liquidity, ensuring both investability and size relevance.The index targets the 70 mid-cap companies ranked just below the top 30 large-cap companies, providing a focused view of Israel’s dynamic mid-cap segment. It is FMC weighted, with caps on individual stocks and sectors to help manage concentration risk.Rebalanced quarterly using a transparent, rules-based methodology, the index provides a disciplined approach to tracking mid-cap performance within Israel’s equity market.(Click on image to enlarge)<img height="416" src="https://imageproxy.pbkrs.com/https://www.indexologyblog.com/wp-content/uploads/2026/01/Exhibit-1-Index-Methodology-Summary.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" original-src="https://imageproxy.pbkrs.com/https://www.indexologyblog.com/wp-content/uploads/2026/01/Exhibit-1-Index-Methodology-Summary.png"/><h3> Breaking Down the Index</h3>A key feature of the S&amp;P Israel 70 MidCap Index is its diversified sector composition, reflecting the structure and diversity of Israel’s mid-cap economy and offering a broader view beyond Information Technology, compared to the large-cap segment. As of Dec. 31, 2025, Real Estate represented the largest share at 24.18%, driven by sustained housing demand and population growth (see Exhibit 2). Industrials represented 20.25%, highlighting the sector’s strength in manufacturing and infrastructure. Information Technology accounted for 11.23%, while Energy (10.68%), Consumer Discretionary (7.08%) and Consumer Staples (4.86%) showed meaningful weight in domestic consumption and industrial energy demand. Smaller allocations to Financials (6.97%), Communication Services (4.20%) and Materials (2.88%) demonstrated comprehensive sector coverage. This diversified structure gives a wide view of Israel’s mid-cap companies while maintaining a balanced sector profile.(Click on image to enlarge)<img height="441" src="https://imageproxy.pbkrs.com/https://www.indexologyblog.com/wp-content/uploads/2026/01/Exhibit-2-GICS-Sector-Composition.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" original-src="https://imageproxy.pbkrs.com/https://www.indexologyblog.com/wp-content/uploads/2026/01/Exhibit-2-GICS-Sector-Composition.png"/><h3> Relative Valuation Advantage</h3>The S&amp;P Israel 70 MidCap Index has displayed relatively better valuation metrics compared with the large-cap segment, underscoring the possible appeal of mid caps in Israel. As of Dec. 31, 2025, the index had a price-to-cash-flow ratio of 10.5, lower than the S&amp;P Israel 30 LargeCap Index’s 13.5, and a higher indicated dividend yield of 2.5% versus 1.7% for the S&amp;P Israel 30 LargeCap Index (see Exhibit 3). This combination of moderate valuations and strong income potential highlights the distinctive investment profile of Israel’s mid-cap segment within the broader market.(Click on image to enlarge)<img height="440" src="https://imageproxy.pbkrs.com/https://www.indexologyblog.com/wp-content/uploads/2026/01/Exhibit-3-Valuation-Multiples.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" original-src="https://imageproxy.pbkrs.com/https://www.indexologyblog.com/wp-content/uploads/2026/01/Exhibit-3-Valuation-Multiples.png"/><h3> Performance Review</h3>In 2025, the S&amp;P Israel 70 MidCap Index delivered its strongest performance for the back-tested period, with a total return of nearly 49.32% in ILS terms, gross of tax. The exceptional results underscore the resilience and growth potential of Israel’s mid-cap segment.(Click on image to enlarge)<img height="452" src="https://imageproxy.pbkrs.com/https://www.indexologyblog.com/wp-content/uploads/2026/01/Exhibit-4-Calendar-Year-Historical-Performance.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" original-src="https://imageproxy.pbkrs.com/https://www.indexologyblog.com/wp-content/uploads/2026/01/Exhibit-4-Calendar-Year-Historical-Performance.png"/> Beyond the calendar-year numbers, the S&amp;P Israel 70 MidCap Index has shown robust long-term performance. Over the past decade, the five-year rolling performance has averaged an annualized 13.97%, with the most recent five-year period reaching 17.87%. These results highlight the consistency and growth potential of Israel’s mid-cap segment within a disciplined, rules-based framework.(Click on image to enlarge)<img height="410" src="https://imageproxy.pbkrs.com/https://www.indexologyblog.com/wp-content/uploads/2026/01/Exhibit-5-One-Month-Rolling-Five-Year-Annualized-Performance.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" original-src="https://imageproxy.pbkrs.com/https://www.indexologyblog.com/wp-content/uploads/2026/01/Exhibit-5-One-Month-Rolling-Five-Year-Annualized-Performance.png"/><h3> Conclusion</h3>Featuring a sector composition distinct from Israel’s large-cap segment, the S&amp;P Israel 70 MidCap Index aims to provide a diversified view across Real Estate, Industrials, Information Technology and other key areas of the mid-cap economy. The index has consistently delivered strong performance over the back-tested period, while maintaining moderate valuations, often higher than large caps. Its transparent, rules-based methodology seeks a balanced representation of Israel’s mid-cap companies within a disciplined framework.<hr/>More By This Author:Inside The Annual Style Indices Rebalance: Methodology, Process And Outcomes 2026 Is The Year Of The Stock Picker? Your S&amp;P Select Industry Indices 2025 Wrapped</div></div>

ISRL

The S&P Israel 70 MidCap Index highlights the growth potential of Israel's mid-cap equities, which are often overlooked in portfolios. This index, derived from the S&P Israel 100 Index, focuses on the 70 mid-cap companies just below the top 30 large-caps, offering a diversified view across sectors like Real Estate and Industrials. As of December 31, 2025, the index showed better valuation metrics compared to large-caps, with a total return of 49.32% for the year. Its disciplined, rules-based methodology ensures balanced representation and strong long-term performance.

Understanding The Israeli Mid-Cap Market