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Tap Israel’s Red-Hot Technology Sector With This Unique ETF
We have previously examined EIS (iShares MSCI Israel Capped, Expense Ratio 0.62%, $113 million in AUM) as the largest “Middle East” fund in the U.S. listed landscape, as it’s more than twice the size of the next largest fund in the segment, QAT (iShares MSCI Qatar Capped, Expense Ratio 0.61%).
While this “Middle East” segment as it pertains to ETFs is still far from mature, with only nine listed funds in total and a cumulative AUM level across all of these funds at around the $334 million mark, there has been moderate growth in terms of net inflows over time as well as product innovation. Speaking of Israel, a fund that we haven’t highlighted in this piece prior to today isolates one specific industry sector, Technology, from the greater Israeli stock market.
ITEQ (BlueStar TA-BIGITech Israel Technology, Expense Ratio 0.75%) debuted in early November 2015 and tracks a proprietary index known as the TASE-BlueStar Israel Global Technology Index.
According to fund literature, the index “Considers all Israeli companies regardless of listing venue and allows for the inclusion of companies operating in a range of industries from information technology to biotechnology to clean and sustainable agriculture and energy technology.” We see sixty-five individual equities within the portfolio, with fund assets under management at $9.8 million presently, and only about 8,900 shares traded daily.
The fund, however, is currently trading less than ten cents away from an all-time high, and has clearly benefited from a global equity rally in the past several months that has not ignored Emerging and Frontier markets, including the Middle East.
As mentioned in the fund prospectus, ITEQ can own both ADRs that trade in the U.S. as well as ordinary shares that trade overseas in Israel, and when we look at top holdings this is evident: 1) CHKP (11.18%), 2) MBLY (10.95%), 3) DOX (9.40%), 4) NICE Ltd. (6.81%), and 5) OPK (4.65%). Of the top five holdings, four trade in the U.S., and some of these names may be readily familiar to the average investor.
From a “market capitalization” standpoint, Mid-Caps have the heaviest representation at (40%), followed by Micro Cap (24%), Large Caps (21%), and Small Caps (15%).
The BlueStar TA-BIGITech Israel Technology ETF (NASDAQ:ITEQ) was trading at $28.45 per share on Wednesday morning, up $0.16 (+0.57%). Year-to-date, ITEQ has gained 14.12%, versus a 5.33% rise in the benchmark S&P 500 index during the same period.
ITEQ currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #40 of 54 ETFs in the Technology Equities ETFs category.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.
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