By Joe Levin
The global pandemic has disrupted so much of how we interact with the world around us.
As the challenges of re-connecting in person continue to persist with each additional variant, technology has fortunately provided us with the ability to stay connected with friends, family, and even to our local spiritual community or synagogue.
In a world where going to the grocery store gives some pause, Israel (6,000 miles from Richmond) never felt so far away – especially since the country was closed to foreigners and tourists for much of the last two years.
But it doesn’t have to be.
Sure, it’s hard to replicate that feeling of awe and history while approaching the Western Wall, or the pain of every scratch and cut (no matter how tiny) while floating in the Dead Sea, or even the joy of reaching the top of Masada just in time for sunrise. And yet, the feeling of connection to a land and to a people can manifest in so many different ways, including on how we invest.
We’ve always said, if Israel is in your heart, or in your philanthropic mission, then Israel should be in your portfolio.
This is not a new concept. In fact, the American Jewish community has been investing in Israel ever since the State was created in the form of Israel Bonds.
Israel Bonds – the first social impact investment
Israel Bonds (www.israelbonds.com) pioneered social-impact investing and have been a mainstay of the Jewish community, straddling the line between investing & philanthropy for over 70 years.
With worldwide sales of over $46 billion since 1951, Israel bonds have played a pivotal role in almost every aspect of Israel’s development, infrastructure, and security.
Today Israel Bonds offer various types of fixed income products – ranging from their new $36 entry point, 1-year “Shalom” bonds with a yield of 0.74%, to their more prominent “Jubilee” bonds where an investor can select the 15-year option and receive a rate as high as 3.2%*, according to February 1, 2022 pricing data.
With the full strength and credit of the Israeli Government standing behind it, Israel Bonds are considered very safe.
Israel has never defaulted, which means investors have always received their promised interest payments and initial investment back upon maturity.
However, as the financial markets have evolved, so has the ability to invest in Israel in new and innovative ways.
Israeli Stocks – become a shareholder in the State of Israel
BlueStar Indexes, founded in 2012, and subsequently acquired by MVIS (www.MVIS-Indices.com) has helped popularize the use of index-based Exchanged Traded Funds (ETFs) to easily access and “own” Israeli companies. ETFs trade like single stocks, you can access them like you buy Apple or Amazon.
The VanEck Israel ETF, for example, tracks the BlueStar Israel Global Index, and allows you to invest in Israeli companies, across all sectors of the economy — companies which are listed on exchanges worldwide, not just limited to the Tel Aviv Stock Exchange.
This group of 111 companies trade on the NYSE under the ticker symbol, “ISRA,” and you can buy it on most trading platforms or through your local financial advisor.
BlueStar’s Israel Indexes have since been adopted as benchmarks for allocation to Israel by Jewish Federations and Foundations across the US, including the Jewish Community Federation of Richmond.
Israeli Technology – sparking our imagination
If there’s one word that encapsulates Israel, it’s innovation. As a 73 year-old start-up, innovation is in Israel’s DNA and technology is a form of national survival and pride.
You can now capture the “start-ups” that have grown up and entered the public markets through the BlueStar Israel Global Technology Index (BIGITech), tracked by the BlueStar Israel Technology “ITEQ” ETF, which also trades on the NYSE.
Through ITEQ you can own a slice of all leading public Israeli Tech companies. This is sure to capture the imagination of us all – and is something that every bar/bat mitzvah and seasoned investor alike can be proud of.
ITEQ captures the 40% of Israel’s economy which is broadly defined as technology, and includes roughly 70 companies that generate 50% of their revenue from technology such as Big Data & Applied A.I., Cyber Security and DefenseTech, Internet Software & Advertising Tech, Clean Energy & Water Tech, 3D Printing, Semiconductor Manufacturing, and Biotech & Medical Devices.
While there has been a bit more volatility on the downside in 2022, reflective of the global headwinds facing technology in general, Israel’s tech ecosystem, as defined by BIGITech, has returned over 16% annualized during the last five years for the period ending January 31, 2022.
Next Year in our Portfolios!
Though it still remains challenging to capture the feeling of being on the ground in Tel Aviv or Jerusalem, by choosing to include innovative Israeli companies in our investment portfolios, another powerful strand of connection to Israel is formed, supplementing our tzedakah and traditional communal involvement.
By Investing in Israel through the financial markets, whether it be stocks or bonds, you can re-capture that spark, that connection to something special regardless of physical distance.
This is surely something we can all “appreciate” over time.
Joe Levin is the former Chief Development Officer of the SF-based Jewish Community Federation and Chief Investment Strategist/Partner at BlueStar Indexes.
Currently he’s the Global Head of Business Development & Strategy at MVIS and longing for a plate of hummus at Abu Hassan in old Jaffa.
For more on Israel Bonds, see article in the Community Section.