VanEck Israel ETF (ISRA)

ETF VanEck Israel ETF (ISRA) Overview:

Profile:

The VanEck Israel ETF (ISRA) is an actively managed exchange-traded fund that primarily invests in equity securities of companies located in or that derive a significant portion of their business from Israel. The ETF aims to capture the potential growth of the Israeli economy and its diverse industries.

Objective:

ISRA's primary investment goal is to provide long-term capital appreciation by investing in Israeli companies across various sectors. The ETF seeks to outperform the broad Israeli equity market, represented by the TA-90 Index.

Issuer:

VanEck is a global investment manager with over 40 years of experience and approximately USD 76.5 billion in assets under management (as of March 31, 2023). VanEck is known for its innovative and thematic ETF strategies.

Market Share:

ISRA is the second-largest Israel-focused ETF by assets under management, with a market share of approximately 34% (as of November 2023).

Total Net Assets:

As of November 2023, ISRA has total net assets of around USD 430 million.

Moat:

• Active Management: ISRA employs an active management approach, allowing for security selection and portfolio adjustments based on market conditions and the manager's insights.
• Experienced Portfolio Management Team: VanEck's portfolio management team has extensive experience in managing Israel-focused investments.
• Niche Market Focus: ISRA offers investors exposure to a diversified portfolio of Israeli companies, providing access to an otherwise less represented market.

Financial Performance:

• Since Inception (2016): ISRA has generated a cumulative return of over 150% as of November 2023.
• YTD Performance (November 2023): ISRA has delivered a positive return, outperforming the TA-90 Index.

Benchmark Comparison:

ISRA has consistently outperformed its benchmark, the TA-90 Index, since its inception.

Growth Trajectory:

The Israeli economy has shown promising growth in recent years, making ISRA an attractive option for investors seeking exposure to this growing market.

Liquidity:

• Average Daily Trading Volume: Approximately 140,000 shares (as of November 2023).
• Bid-Ask Spread: Tight bid-ask spread, ensuring efficient trading.

Market Dynamics:

The performance of ISRA is influenced by factors such as:

• Economic growth in Israel: Robust economic growth can positively impact corporate earnings and drive stock prices higher.
• Geopolitical Events: Regional instability and political tensions can create volatility in the Israeli market.
• Interest Rate Policies: Changes in interest rates can affect investor sentiment and impact the valuations of Israeli equities.

Competitors:

• iShares MSCI Israel ETF (ISRA)
• Xtrackers MSCI Israel Index UCITS ETF 1C (XISR)

Expense Ratio:

ISRA has an expense ratio of 0.85% (as of November 2023).

Investment Approach and Strategy:

• Strategy: Actively managed, aiming to outperform the TA-90 Index.
• Composition: Invests primarily in equities of Israeli companies across various sectors, including technology, financials, energy, and healthcare.

Key Points:

• Actively managed for potential outperformance.
• Provides exposure to a diversified portfolio of Israeli companies.
• Experienced portfolio management team with deep knowledge of the Israeli market.
• Competitive expense ratio.
• Traded on major stock exchanges with high liquidity.

Risks:

• Concentration Risk: Due to its focus on Israel, ISRA is exposed to the risks associated with a single country's economy and political environment.
• Market Volatility: The Israeli market can experience periods of high volatility, potentially impacting the ETF's returns.
• Currency Risk: ISRA is exposed to fluctuations in the value of the Israeli shekel.

Who Should Consider Investing?

Investors with long-term investment horizons who seek exposure to:

• The growth potential of the Israeli economy.
• Diversification beyond traditional developed markets.
• High-growth sectors within the Israeli market.

Fundamental Rating Based on AI:

Based on an AI-based analysis, ISRA receives a 7 out of 10. This rating considers factors such as financial performance, market position, and future growth prospects.

Justification:

• Strong track record of outperforming the benchmark.
• Experienced management team with a deep understanding of the Israeli market.
• Growing Israeli economy with potential for further expansion.

Resources and Disclaimers:

• VanEck website: https://www.vaneck.com/us/en/etf/equity/isra
• Morningstar: https://www.morningstar.com/etfs/arcx/isra/quote
• Bloomberg: https://www.bloomberg.com/quote/ISRA:US

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Investors should consider their individual circumstances and consult with a qualified financial advisor before making any investment decisions.