One Country, One Index: The Defiance KSM Israel 120 ETF Explained
A new ETF just landed on NASDAQ with a locally maintained Tel Aviv index at its core, putting it on a collision course with billion-dollar rivals that track very different benchmarks. Whether that distinction is meaningful enough to pull investors…
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Defiance ETFs has added a new single-country fund to its lineup: the Defiance KSM Israel 120 ETF (NASDAQ:ISRL), a portfolio built to track the KSM Israel 120 Index, a broad benchmark of roughly 120 Israeli companies. The fund is listed on the NASDAQ and is organized as a series of Tidal Trust V, a shared trust structure that Defiance and several other boutique issuers use to launch funds.
According to the fund’s summary prospectus filed August 28, 2026, ISRL carries a net expense ratio of 0.59%. On a $10,000 investment, that works out to about $59 a year in fund fees, before any brokerage costs or bid-ask spreads. ISRL began trading recently enough that only 16 trading days of price history were available as of this writing, and shares closed at $24.90 on September 23, 2026.
What the Fund Actually Owns
ISRL is an index fund, meaning it aims to mirror a published benchmark rather than have a portfolio manager pick stocks. That benchmark, the KSM Israel 120 Index, is maintained by KSM, the indexing arm affiliated with a large Israeli asset manager. As the name suggests, the index is designed to represent the roughly 120 largest and most liquid companies listed on the Tel Aviv Stock Exchange. Individual stock weights inside ISRL’s portfolio had not been published in the fund’s snapshot feed at the time this article was written, so specific position sizes are not stated here.
Even without ISRL’s exact weightings in hand, the character of Israeli large-cap indexes is well established from peer funds. Portfolios tend to be dominated by Israeli banks, insurers, semiconductor and semiconductor-equipment names, cybersecurity and enterprise software companies, defense contractors, telecom, real estate, and a smaller cluster of renewable energy and shipping names. That mix means a fund like ISRL is effectively a concentrated play on the Israeli economy and, more specifically, on a handful of sectors that carry outsized weight inside it.
Two structural points matter for retail investors. First, ISRL is a plain-vanilla equity index ETF with no leverage, no options overlay, and no derivatives-based income strategy. Second, because most of its underlying holdings trade in Israeli shekels, the fund carries currency exposure. A stronger shekel versus the dollar helps U.S. investors; a weaker shekel hurts, independent of what the underlying stocks do.
How It Stacks Up Against Existing Israel ETFs
ISRL is not the first Israel-focused ETF available to U.S. investors. The iShares MSCI Israel ETF (NYSEARCA:EIS) has been trading for years and had net assets of about $1.03 billion as of May 31, 2026. The VanEck Israel ETF (NYSEARCA:ISRA) is a smaller competitor, with net assets of about $153.2 million as of June 30, 2026. Current expense ratios for those two funds were not returned by the data sources used for this article, so a direct fee comparison at 0.59% cannot be verified here and readers should check each issuer’s page before drawing conclusions.
The differentiation Defiance is leaning on is the underlying index. EIS tracks an MSCI Israel benchmark and ISRA tracks a MarketVector index that includes Israeli-linked companies listed abroad. ISRL, by contrast, is anchored to a locally maintained Tel Aviv index, which tilts the fund more purely toward Tel Aviv-listed shares.
Who It May Suit and the Risks to Understand
ISRL is designed for investors who want targeted exposure to Israeli equities inside a diversified portfolio, either as a small international sleeve or as a tactical position. The risks are the ones common to any single-country fund. Concentration is the defining feature: one economy, one currency, one political and security environment. The Israeli market’s heavy weighting in banks and technology means sector-level swings can drive returns as much as country-level factors.
New ETFs also carry mechanical risks. With only a couple of weeks of trading history, ISRL has no meaningful performance record to evaluate. Small early asset bases can produce wider bid-ask spreads, and funds that fail to gather assets sometimes close and return cash to shareholders, which can create tax friction. Defiance is best known for thematic and income-oriented products rather than international index funds, so ISRL represents a step into a different category for the issuer.
What to watch from here is straightforward: how quickly ISRL accumulates assets, how tightly its market price tracks its net asset value, and how the KSM Israel 120 Index performs relative to the older MSCI- and MarketVector-based Israel benchmarks over its first full year of trading.
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Jake has been been working in financial media for almost 15 years. He focuses on all things personal finance for 24/7 Wall St. with high hopes to educate and entertain. Most recently, Jake spent 12 years working various roles at The Motley Fool. He started copy editing fool.com content, worked on premium and marketing campaigns, and helped launch The Ascent, a personal finance brand.
His work has been featured on platforms like MSN, Yahoo Finance, USA Today, and more. He's written about credit cards, social security, ETFs, savings accounts, and just about anything else you can imagine when thinking about money. Jake love to cook, play golf, and tell people he's never had a cavity. (It's true!)
