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This Tech ETF Soars Despite Not Including Any US Stocks

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October 3, 2017 8:39 am
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This Tech ETF Soars Despite Not Including Any US Stocks

Thanks to the likes of Apple Inc. (NASDAQ:AAPL), Microsoft Corporation(NASDAQ:MSFT), Facebook Inc (NASDAQ:FB) and Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), just to name a few, the technology sector is the best-performing group in the S&P 500 this year.

Technology's bullish ways are not confined to U.S. borders. Additionally, investors looking for exposure to the sector outside do not need to lean emerging markets stocks if that asset class is not suitable in terms of risk tolerance. Israel, a developed market, is home to some of the best-performing technology stocks in the world.

That sentiment is confirmed by the BlueStar TA-BIGITech Israel Tech ETF (NYSE:ITEQ). After hitting another record high Monday, the BlueStar TA-BIGITech Israel Tech ETF is up 28.1 percent year to date, meaning the Israel tech exchange-traded fund is outpacing the Technology Select Sector SPDR (NYSE:XLK) by nearly 600 basis points.

Start-Up Nation

In the U.S., investors are familiar with tech-heavy locations, such as Silicon Valley in Northern California, Silicon Alley in New York and many more, including Austin and Los Angeles. However, Israel is every bit a credible destination for tech investors having been dubbed “start-up nation” in recent years.

Related Link: Tempting Tech ETFs

TA-BIGITech, ITEQ's underlying index, “is the broadest, deepest and most complete benchmark of the Israeli Global Technology sector. 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,” according to ITEQ's issuer.

ITEQ holds 56 stocks, including some that trade on U.S. exchanges. That group includes Check Point Software Technologies Ltd. (NASDAQ:CHKP) and Amdocs Limited (NASDAQ:DOX). Those two stocks combine for over 21 percent of ITEQ's weight.

A Diverse Approach

Israel's technology sector is innovative and highly diverse, themes reflected in ITEQ. The ETF provides exposure to about a dozen industry groups, with over half its weight dedicated to software companies and technology services providers

However, ITEQ also features exposure to other sectors, including a roughly 10-percent weight to the healthcare sector as well as some aerospace and defense exposure.

Related Link: Best Sector ETFs For October


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