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The fund prospectus claimed its "investment object is long-term growth of capital," but warned that "investments in Israel involve substantial risks that are not typically associated with investments in the United States."

"We liked the investment climate in Israel," said Adam Shore of Harris Associates, which managed the fund. "Israel is a great place to invest."

But not great enough, it turned out.

Less than a year later, a letter went out to the 1,200 investors that the fund was closing and they must either redeem their shares in Growth Fund of Israel for cash, exchange them for shares of other New England Funds, or default to New England Star Worldwide Fund, a broad-based global fund.

"The Fund's failure to attract sufficient assets is the key factor in this decision," said a recent letter. "We believe that the long-term prospects for Israeli investments remain very attractive. However, the Middle East's unexpectedly turbulent political atmosphere has made the Fund more speculative than many investors would prefer, limiting potential asset growth."

Nevertheless, Burt Lazarow, B'nai B'rith associate executive vice president, believes the fund is "still a good investment program and a good way for people to develop giving to Israel."

Disappointed to see it fold so soon, Lazarow blames the fund's management rather than Israel's economy for its lack of success. "The marketing left a lot to be desired," he said, concerned that the fund "wasn't given long enough" to succeed.

"Any single country fund is more risky than a diversified fund," said Lazarow.

But Shore says "a lot of effort was put into that marketing." He says the fund was too small to succeed under current economic and political conditions.

Still, Henry Schmelzer, president and chief executive officer of New England Funds, is pessimistic about foreign investment in Israel and sees a "great likelihood" that investment in the Jewish state will drop.

"Things have gone from bad to worse" since Prime Minister Yitzhak Rabin's assassination in November 1995, said Schmelzer. "It's unlikely that we're going to see things turn around in the near future…Israel has to get people comfortable again."

Shore, on the other hand, believes the Israeli-Palestinian peace process is a marginal issue for Israel's economy, outweighed by "more mundane issues" like interest rates, inflation and government budget deficits. He predicts that if Israel can "control spending," foreign investment will resume.

Shore said he is disappointed that the Growth Fund had to be closed and still considers Israel "an exciting, emerging market."

Middle East economics have come to the forefront this year as Israel and Arab nations acknowledge their potential as an integrated economic region.

Lazarow said B'nai B'rith is seeking a new investment firm to host an Israeli mutual fund. Metropolitan Life, which merged with New England Funds, is considering the fund.