Israel is playing with the big boys. It has been upgraded to a developed-market status by Investment services firm MSCI Inc.

As of next May, Israel will be included in the
MSCI World Index, which includes most developed markets, and in the MSCI EAFE Index, which includes only Europe, Australasia and the Far East.

Sounds grand but Israel's relative weight in the MSCI World Index will be significantly smaller than its position in the MSCI Emerging Markets Index, which throws up the question: Is the upgrade such a good thing?

Israeli stocks may initially suffer as their weighting in developed market MSCI indexes will be lower than currently in emerging market benchmarks. And emerging market investors are likely to be quicker to get out of the market than developed market investors would move in to it. In addition, investors who actively manage their portfolios rather than passively following indexes such as MSCI could still be cautious about investing in the country. Some experts estimate the country could lose up to $2bn in global investments.

Either way, Israel now has to familiarise itself to a whole new - broader - market. Ester Levanon, chief executive of the Tel Aviv Stock Exchange, summed it up nicely today. She told me “It will take time but we are looking at it from a long-term. I don’t see the upgrade as a good or bad thing. It’s a fact and so now we have to with it the best we can.” Not a bad mantra for life me thinks.