Welcome to the AMIDEX35™ Israel Mutual Fund

Since 1999 AMIDEX35™ Israel Mutual Fund is the only Israel index mutual fund investing exclusively in Israeli companies traded on Tel Aviv and U.S. markets.

I am sad to advise you that we are closing the AMIDEX35 Israel Mutual Fund.

I’ve devoted 23 years to this very special mission and cannot resist the urge to share with you a bit of the history of triumph, challenges, and legacy of the fund.

I’ve been telling the same story in front of TV reporters, investor groups, synagogue groups, Zionists, and financial advisors for quite a long time. Here’s the short version, and a bit of a postscript:

My grandfather made it to America before WWII. Most of his siblings and their children were murdered during the Holocaust. My father was subjected to the poverty of the Great Depression and worked many jobs to help support his relatives while simultaneously and gradually finishing college. He served in the in the U.S. Army in the South Pacific. An ardent Zionist, he was a member of a Masada, which was a Zionist movement founded at the end of the war focused on gathering Jews form the displaced persons camps in Europe and settling them in Israel. My parents met at a Masada meeting while working to organize political and financial support for the founding of the State of Israel.

Both of my parents were career civil servants and, with five kids, there wasn’t much money to save or invest. But through his Zionist connections, my father learned of a company called Ampal. Ampal was a holding company formed in 1942 that provided loan guarantees and other capital to launch industrial and commercial development in what was then Palestine. My father bought himself some shares of Ampal and he bought me five shares as well. I think the total value of my shares was $7.50. He taught me that as a shareholder, I had a stake in the development and advancement of businesses in Israel. When I was about 10, he took me to the Ampal annual shareholder’s meeting at the Waldorf-Astoria. To me, a kid, this was a very big deal. There were hundreds of fancy people in a fancy room drinking coffee and listening to speeches. I had no idea what the speeches were about, or what an annual shareholder meeting was, but the feeling in the room was palpable. These people came to show support and love for Israel. They used Ampal both as an investment and as a concrete expression of their support of Israel. Those five shares of Ampal and the feeling of that meeting impacted me for life.

Postscript: Ampal saw a period of remarkable investment success. At one point in the 1990s it owned a one-third interest in Motorola Israel, which at the time was the one of the leading market innovators in the booming cell-phone world. Later, Ampal was a key investor in a gas pipeline that was supposed to bring gas from Egypt to Israel and expand the economic partnership between the countries. Sadly, terrorists blew up the pipeline, and it was never rebuilt. Ampal ultimately went into bankruptcy after more than 70 years of launching and capitalizing successful businesses, hotels, factories and other companies throughout Israel. I lost my $7.50 investment but remain proud of having been a shareholder.

In the late 1990s Israel was absolutely dominant in the world of hi-tech. One company after another began creating and selling leading-edge communications, internet, medical and imaging technologies. Israeli companies were thriving and attracting a lot of media attention. I wanted to invest in an array of Israeli companies but could not find a traditional open-end mutual fund that invested solely in Israeli stocks. I went door to door to the biggest investment companies, but none were interested in establishing an Israel mutual fund. Their views of Israel were nearly uniformly obsolete. They saw Israel as a third-world nation, wrapped in war and conflict, with nothing more than an array of Socialist kibbutzniks dancing the “Hora” while wearing funny looking hats and working to drain swamps. I came to believe that I had a mission to fulfill – changing perceptions about Israel and educating Americans about Israel’s almost miraculous development into one of the leading technology developers in the world.

I went to the Israel Economic Mission in NYC and pointedly asked why there was no major investment house that would start and run an all-Israel mutual fund. We began brainstorming what a fund might look like and how one could be created outside of the big-name brokerage firms. Ultimately, Gadi Beer, another officer at the Economic Mission and I set out to create a broad partnership of investors, philanthropists, Israel advocates and business leaders to fill the void and offer Americans an all-Israel open-end US-based mutual fund. I quit my job as Managing Partner of a thriving law firm that I built and grew to pursue my passion for generating support for Israel.

We started the fund in 1999 with the help of too many fine people to name each in this memo. Our initial Board of Advisors included leading professors, Congressmen, former Israeli Government officials, top lawyers, hi-tech entrepreneurs, friends, Jewish community leaders, family members and ardent and generous philanthropists. Our first meeting brought me the same feeling I remembered from my first Ampal meeting – I was again amongst a talented and diverse group of people who shared the desire to invest in and support Israel. We quickly formed the outline of a fund that would serve as an easy and familiar instrument for even small investors and for those seeking to demonstrate their commitment and belief in the long-term success of the people and nation of Israel. Our fund took off quickly and soared in 1999 and early 2000, outperforming most foreign funds and nearly doubling in value. We held hundreds of meetings and conducted hundreds of presentations around the country and attracted some of the largest brokerage firms in the world to help us distribute the fund. Assets in the fund grew quickly. The technology investment field was ablaze with activity at the time and the election of a new government in Israel and other political changes suggested that a peace deal may become viable, fueling further investment. We looked forward to expanding our investor base and launching additional Israel-focused funds.

But then we hit some very significant obstacles. The peace plans endorsed by Israel were summarily rejected by Palestinian officials who responded not with a treaty, but instead with a vicious and prolonged Intifada. Once again images of Israel flashed on the news showing a war zone, not a technological and financial powerhouse of a country, and brokers and investors suddenly performed an about-face, shying away from investment in Israeli stocks. We decided to persevere, hoping that the violence would end, and the narrative would refocus on the remarkable successes of Israeli companies.

Rather than seeing the situation brighten, we saw the barbarism of the September 11 attacks on the US. Our Amidex office, near Wall Street, became inaccessible and the aftermath of the attacks soured the entire investment world for years.

The combination of the resumption of the intifada and the September 11 tragedy sent the fund into a tailspin. We decided again to preserve and, rather than close the fund, we retrenched. We left NYC and temporarily moved operations to the basement of my home in Pennsylvania. We were forced to furlough all marketing and operations staff, and the fund was able to continue primarily due to the valiant efforts of Gadi Beer. Gadi was integral to the fund even before its inception and stepped up to take over nearly all the complex duties of running the fund.

Although things stabilized a bit in the following years, we were unable to garner the volume of assets under management necessary to keep the fund’s expense ratio at a competitive level. The administrative, legal, compliance, and regulatory costs of running an Israel-centric fund are formidable. We had to create systems and relationships from scratch. Big funds with millions of investors can spread costs over a huge base, resulting in low-cost ratios. Tiny funds like ours, however, spread necessary expenses over a small divisor, and our expense ratio never reached our goals.

As the years went by, the whole mood and feel of America’s relationship with Israel changed. As the generations changed, so did the commitment to supporting a Jewish homeland in Israel. Assimilation, Israel-apathy, a solid shift to the left, and loss of collective memory made it even more difficult to market the fund to investors.

The next blow came from the “BDS” movement. It became popular in America to demonize and delegitimize Israel, especially on college campuses. Although the actual impact on Israel’s economy was negligible, the poor publicity, constant media coverage of anti-Israel demonstrators, and change of mood particularly among American Jews, combined to make it nearly politically incorrect to be an outward and unabashed supporter of Israel.

Another negative factor was the financial crisis and the world-wide recession. Investments turned down and the mechanisms by which funds were sold to buyers changed. Getting our fund listing in the right states and on the right investment platforms became more and more difficult. Some firms feared approaching their clients with an Israel-focused fund, citing perceived political risks. It is indeed ironic that Amidex endured, while major brokerage firms like Lehman Brothers and Bear Stearns folded.

All these factors combined made it extremely difficult for Amidex to survive. The primary reason that the fund continued through the last many years is the dedication and commitment of Gadi Beer. Gadi and I remained optimistic that strength of Israel’s companies would overcome our challenges, so we labored on in the hope of partnering or transferring the fund to another company with a greater ability to garner assets. I proudly worked for the fund and served as President and Chairman of the Board without compensation for two decades. Gadi has worked diligently from before the fund launched until after the fund closed for business. Ultimately, it simply became impossible to continue our mission.

The final blows were a combination of the Covid-19 crisis and a dramatic increase in the regulatory demands and accompanying expenses imposed by state and federal regulators. The costs of compliance increased, but the fund had too small a base of investors over which to spread the expenses.

It is extremely sad for me to see the fund close. I still believe in the mission of educating people about the successes and accomplishments of the Israeli People. I still believe in the ingenuity and creativity of Israeli companies and continue to believe that they will lead the world in key product development. I continue to believe in the importance of taking concrete actions to support Israeli businesses and remain committed to using investment in Israel as both a symbol of my bond with Israel and as an opportunity for long-term investment returns. Being the groundbreaker for our type of Israel-related investment vehicle was difficult, exhausting, personally expensive, and hugely exhilarating. It has been the most important work of my life, and I am glad to have served as the builder of a bridge to a new world of options for continuing investment in Israel. Many other companies followed our example and now offer Israel investment opportunities ranging from mutual funds to ETF’s to crowd-sourced investment directly into startup companies. We helped pave a road for others to offer an expanded array of Israel investment vehicles.

I want to thank all our current and past directors, employees, investors, and friends for their undying support of our noble venture. I want to especially thank my family for unhesitatingly supporting my mission at deep personal and financial expense. We can all be proud of the role we played in the AMIDEX35 Israel Mutual Fund, which led thousands of people to the opportunity to invest in Israel and led to the development of platforms that now allow thousands more to do so into the future. It is my hope that we in some small way helped connect Americans to Israel and to led people to appreciate the unique and beautiful nation that it has become. I wish you all health and safety as we together pray for the peace, security and continued prosperity of Israel.

Clifford A. Goldstein

AMIDEX35 Israel Mutual Fund (AMDEX)

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AMIDEX Fund's distributor is Matrix 360 Distributors, LLC, 4300 Shawnee Mission Parkway, Suite 100, Fairway, KS 66205

The AMIDEX35™ Fund is not diversified and is composed of only 35 companies. All investments are inherently subject to market risk. The relatively limited liquidity of some of the equities in the portfolio may affect the fund's ability to acquire desired positions quickly or unable to dispose of securities at a desirable price and time. The fund also invests in foreign country securities which may involve economic, political and currency risks. These factors may adversely affect the value of your investment. The fund charges a 2% redemption fee for shares redeemed with 365 days of purchase.

An investor's return and principal value will fluctuate so that an investor's shares, when redeemed, may be more or less than their original cost. For a complete discussion of the risks, charges and expenses please call1-888-876-3566. Please read the prospectus carefully before you invest or send money. Matrix 360 Distributors is not affiliated with Index Investments, Inc

AMIDEX Funds, Inc. is an open-end investment management company currently consisting of one portfolio, the AMIDEX35 Israel Mutual Fund.

AMIDEX35™ Israel Mutual Fund is the only fund to invest in Israel's 35 largest companies traded on U.S. and Tel Aviv Exchanges.