The last two weeks saw a steep decline in share prices after the Israeli aggression on Gaza expanded to new fronts. This was reflected in the acceleration of withdrawals from exchange-traded funds (ETFs) that track Israeli stocks.

According to Lipper data, the iShares MSCI Israel ETF had net outflows of $2.5 million between October 9 and October 20, leaving it with assets of $111.62 million. Over the same period, the fund was down 13.8%.

وسائل إعلام إسرائيلية: انخفاض في نشاط التكنولوجيا الفائقة في ظل الحرب بنسبة 70٪ يفيد بأنّ نشاط شركات هذا القطاع تضرّر.#غزة #فلسطين #الثورة_الكبرى #طوفان_الأقصى pic.twitter.com/IYbqRiCF50

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"The market doesn't like uncertainties," said Sammy Suzuki, the head of emerging market equities at AllianceBernstein. "And clearly, there's a lot of uncertainties right now."

In addition to the recent developments in Gaza, the tensions on the northern border of occupied Palestine with Lebanon cast a shadow on the Israeli stock market in light of fears of the confrontation taking to new fronts at any time.

ETFs were underperforming most of their peers before the October 7 operation, said Steven Schoenfeld, CEO of Market Vector Indexes, who created the index behind the $78.4 million BlueStar Israel Technology.

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"But the performance has worsened since then, both due to equity market drops and the significant fall of the Israeli shekel in the past three weeks," he added.

The shekel has dropped below 4 to the dollar and is currently trading at about its lowest point in over eight years.

Over the past two weeks, ETFs that follow Israeli technology stocks, like the $75.4 million ARK Israel Innovative Technology ETF and the BlueStar Israel Technology ETF, have seen net outflows of $1.9 million and $7.2 million, respectively.

During the same period, the funds decreased by 9% and 12.3%, respectively.

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