Tel Bond 20 Index

The **Tel Bond 20 Index**, officially the **Tel Bond-20 CPI Linked Index**, is a Tel Aviv Stock Exchange (TASE) index of 20 large, fixed-coupon corporate bond series linked to Israel’s consumer price index. Its constituents are selected from eligible bonds in TASE’s Tel-Bond universe. The index measures their gross total return, rather than the performance of a single bond or issuer. ^[1] ([market.tase.co.il](https://market.tase.co.il/he/market_data/index/707/about))

Scope and history

TASE launched the index on **1 February 2007**. It was the first index in the exchange’s Tel-Bond family, which subsequently expanded to cover other groups of corporate bonds. TASE identifies Tel Bond 20 as the flagship of that family. Its historical series begins on its launch date; TASE describes the early history as an actual index history, not a backtest constructed for a later launch. The published starting value was 200.49, inherited from an earlier CPI-linked corporate-bond index. That starting number is a reference point for the index series, not the face value or issue price of any constituent bond. ^[1][2] ([market.tase.co.il](https://market.tase.co.il/he/market_data/index/707/about))

The word *20* refers to bond **series**, not necessarily 20 different borrowing institutions. A single issuer can have more than one eligible series, although an issuer-level weight limit applies. Likewise, *corporate* describes the classification of the debt included in this TASE index: it is not an index of Israeli government bonds, bank deposits or shares. The index’s narrower scope is important when comparing it with a broad fixed-income measure. Its rules target a particular combination of issuer debt, CPI linkage, fixed coupons and relatively large outstanding market value. ^[1]

Eligibility and selection

A prospective constituent must belong to the Tel-Bond universe and satisfy the index’s additional requirements. TASE describes the selected securities as fixed-coupon, CPI-linked corporate bonds and ranks eligible series principally by market capitalization. The index normally holds 20 series; it does not simply include every bond traded on the exchange or every bond issued by a company whose shares trade there. Market capitalization is a selection criterion, while separate limits constrain the weights assigned after selection. ^[1] ([market.tase.co.il](https://market.tase.co.il/he/market_data/index/707/about))

The published minimum credit-rating requirement is **A− from Maalot or A3 from Midroog**. If both agencies rate a series, the lower rating governs this eligibility test. TASE specifies a higher threshold for a foreign bond series: **AA from Maalot or Aa2 from Midroog**. These are index-entry rules, not statements that a qualifying bond cannot default or that its market price cannot fall. A rating can change during the life of a bond, and an index holding can subsequently cease to meet an applicable requirement. ^[1]

TASE also publishes separate replacement ranks: **16 for entry and 24 for exit**. These ranks create a buffer around the index’s 20 places. In practical terms, a challenger and an incumbent are not treated identically merely because their market-capitalization ranks move past position 20 during a review. The buffer helps explain why the constituent list need not be the 20 highest-ranked securities on every day between reviews. Selection remains subject to the exchange’s complete index rules and scheduled review process. ^[1]

Reviews, weighting and calculation

The scheduled constituent review is monthly, on the **penultimate trading day of each month**. As a result, the securities represented by Tel Bond 20 can change over time as bonds are issued, mature, are repaid, change rating or move in relative market value. An index observation from one year therefore need not represent precisely the same bond series as an observation from another year. TASE publishes the current composition separately from the index level. ^[1][3]

TASE specifies a **10% weight cap for an individual bond** and a **20% limit for bonds of one issuer** in this index. Those limits matter because selection by market capitalization alone could otherwise give a particularly large series or a prolific issuer a greater share of the measure. The caps limit concentration under the index methodology; they do not remove credit exposure to the underlying issuers. With only 20 series, the measure is also more concentrated by design than an index covering a substantially larger number of eligible bonds. ^[1]

Tel Bond 20 is a **gross total-return** index. Its calculation convention incorporates returns from the constituent bonds rather than reporting price movements alone. *Gross* distinguishes the published index calculation from the after-fee, after-tax return that a holder of a financial product might receive. TASE classifies it as a tracking index and disseminates values **every 15 seconds during trading**. The index level is a calculated measure: it is not itself a bond, a cash payment or a quoted price at which all 20 components can necessarily be traded together. ^[1][2] ([market.tase.co.il](https://market.tase.co.il/he/market_data/index/707/about))

For identification in market-data systems, the exchange assigns the index **code 707** and **ISIN IL00BIDX7078**. TASE also lists Bloomberg symbol **TEL-B20** and Reuters RIC **.TELBOND20**. Its short name, “Tel Bond 20,” can obscure an important feature: the index described here is specifically **CPI-linked**, not a generic collection of every type of Israeli corporate bond. ^[1]

Inflation linkage and sources of risk

The constituent bonds’ linkage refers to the **Israeli consumer price index**, or CPI, rather than to the Tel Bond index level itself. Israel’s Central Bureau of Statistics publishes the CPI, which records changes in consumer prices. CPI linkage is a contractual characteristic of an individual bond; the Tel Bond 20 index aggregates the market performance of eligible linked bonds. It should therefore not be read as a direct measurement of current inflation or as a guarantee that its value will rise whenever a monthly CPI figure rises. ^[1][4] ([market.tase.co.il](https://market.tase.co.il/he/market_data/index/707/about))

Several effects can act on the index at once. The linkage terms and coupon payments affect a bond’s cash flows, while trading prices also respond to prevailing interest rates, the yields available on other bonds and assessments of issuer creditworthiness. When required yields rise, the market value of existing fixed-coupon bonds can fall. An issuer-specific credit problem can also weigh on a constituent even if inflation is increasing. Conversely, an index return is not interchangeable with the CPI inflation rate: it reflects the combined market and cash-flow performance of a changing basket of corporate debt. These distinctions follow from the index’s fixed-coupon, CPI-linked and total-return characteristics. ^[1][4]

Liquidity is a separate consideration. An index can be disseminated frequently even when particular underlying bond series trade less frequently than its published update interval. In **June 2026**, TASE announced changes to its corporate-bond-index liquidity methodology centered on median daily turnover over 180 trading days, with different entry and exit thresholds. The announcement stated an **expected** effective date of **27 August 2026**. That date was presented as an expectation; it should not, on its own, be taken as confirmation of implementation for every constituent. Current eligibility should be checked against TASE’s operative rules and published composition. ^[5] ([tase.co.il](https://www.tase.co.il/en/content/news-lobby/20260618_pr))

Related indices and uses

Tel Bond 20 occupies one part of TASE’s corporate-bond index family. The **Tel Bond-40 CPI Linked Index** covers 40 eligible fixed-coupon, CPI-linked corporate bond series **not included** in Tel Bond 20. The **Tel Bond-60 CPI Linked Index** combines the series in those two indices. Tel Bond 60 consequently covers a wider set of CPI-linked series, whereas Tel Bond 20 isolates the 20 selected large-series constituents under its own methodology. TASE also maintains indices for other corporate-bond segments, including non-CPI-linked shekel bonds. These measures should not be treated as interchangeable merely because they share the Tel-Bond name. ^[6][7] ([market.tase.co.il](https://market.tase.co.il/en/market_data/index/708/major_data))

The index can serve as a reference for describing the performance of its defined market segment and as a target for products designed to track it. TASE lists exchange-traded funds associated with the index, but an ETF is a separate security with its own holdings, expenses, trading price and operational features. The existence of a tracking product does not make an index level directly investable or ensure that a product’s realized return exactly equals the published gross index return. TASE’s distinction between tracking indices and other benchmarks explains why dissemination and calculation rules matter to products referencing an index. ^[2][8] ([tase.co.il](https://www.tase.co.il/en/content/knowledge_center/indices_overview))

Comparisons of Tel Bond 20 returns over time also require attention to what the index includes. Its gross total-return convention differs from a price-only series, and its constituent list is reviewed monthly. Its CPI-linked corporate-bond exposure differs from both nominal corporate debt and sovereign inflation-linked debt. An observed difference between two indices may therefore reflect differences in linkage, credit exposure, bond maturity, constituent weights or calculation rules, rather than one common underlying change in the Israeli bond market. ^[1][6][7]