Categories: Emerging MarketsInvestingTechnologyU.S. Investing

Tap Israeli Tech Companies With This ETF

This week’s exchange-traded fund (ETF) invests in tech companies based in or linked to Israel, a country that is an industry leader.

The ARK Israeli Innovation ETF Hedged (IZRL) is a $20.67 million non-diversified fund that normally invests 80% of its total assets in securities that are included in its benchmark index, depositary receipts of securities included in the index or underlying stocks of depositary receipts included in the index. While the United States easily is the largest market for the tech industry, producing some of the most influential and biggest companies in the world, there are plenty of sizable opportunities abroad.

For that reason, investors should not become dependent on simply buying shares in the popular FANG (Facebook, Amazon, Netflix and Google) stocks that are based in the United States. Israel is one of the other places in the world that has become a hotbed of innovation.

ARK is known for actively managing technology ETFs, such as ARK Innovation ETF (ARKK) and ARK Web x.0 ETF (ARKW), neither of which invest in companies based in or linked to a specific country. ARK rolled out the ETF focused on Israel in late-October 2015, noting that while it did not intend to do a country-specific fund, Israel and Israeli-based companies continuously were showing up in the firm’s research.

ARK’s original goal of setting up an innovation fund without borders happened to end up focused on Israel. IZRL’s investments are based on the concept of disruptive innovations and ARK concluded Israel is an innovation powerhouse.

Pure tech stocks account for the majority of IZRL’s lineup, but it also invests in industries that will be affected by technology, including health care and telecommunications.

The fund’s top 10 holdings include Intercure (INCR), 4.14%; CyberArk Software (CYBR), 3.27%; Stratasys (SSYS), 3.15%; Mellanox Technologies (MLNX), 2.99%; Camtek (CAMT), 2.90%; Tower Semiconductor (TSEM), 2.88%; Silicom (SILC), 2.74%; Check Point Software Technologies (CHKP), 2.70%; Ituran Location and Control (ITRN), 2.68%; and Sapiens International Corp (SPNS), 2.68%.

Chart courtesy of StockCharts.com

IZRL currently has $19.54 million in assets, its expense ratio is 0.49% and has a 12-month yield of 2.64%. As you can see in the chart above, IZRL is up more than 10% in the past 12 months.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.