Is It Time To Own Israel In Your Portfolio?
Benzinga recently had the chance to speak with Steven Schoenfeld, founder and CIO of BlueStar Indexes, about the BlueStar TA-BIGITech Israel Technology ETF (NASDAQ: ITEQ) and the types of unique investment opportunities that Israel provides for U.S. investors. Schoenfeld discussed the stability of Israel’s economy, its most exciting new tech companies and the impact of the oil collapse.
Many U.S. investors are unsure about investing in companies located in a region of the world that can be as geopolitically unstable as the Middle East, but Schoenfeld said Israel’s economy is more insulated from this risk than it may seem.
“Because of its small domestic market, many of the local Israeli firms rely on exports, which provides a certain degree of insulation from regional geopolitics,” Schoenfeld told Benzinga. He added that BlueStar has found that Israeli financial markets are much more correlated with global economic trends than regional politics.
When Benzinga asked about unique investment opportunities in Israel, Schoenfeld said the country is home to some of the most exciting global technology exporters in the world.
“Technology exports account for a very important and growing slice of Israel’s economy,” he explained.
Schoenfeld named several Israeli tech companies that he finds particularly exciting, including Check Point Software Technologies Ltd. (NASDAQ: CHKP), Cyberark Software Ltd (NASDAQ: CYBR), Orbotech Ltd (NASDAQ: ORBK) and Mobileye NV (NYSE: MBLY).
Finally, Schoenfeld told Benzinga that, while oil-producing economies around the world have been devastated by the collapse in crude prices, Israel’s economy has gotten a huge shot in the arm.
“Because it currently remains a net energy importer, the dramatic decline in global oil prices over the past year continues to provide a significant tailwind to the Israeli economy in the form of a lower overall energy bill and improved current account balance,” he explained.
Since Israel currently imports almost all of its oil, the economic stimulus effect should continue for as long as oil prices remain depressed.
Disclosure: The author holds no position in the stocks mentioned.
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