The BlueStar Israel Technology ETF (NYSE: ITEQ), the first exchange traded fund to one of the world's best ex-Asia, ex-U.S. technology scenes, is celebrating an important milestone, having recently topped $100 million in assets under management.
Crossing that much ballyhooed asset level is confirmation for ITEQ, which debuted in 2015. It's confirmation that investors are responding to the investment thesis offered by Israel's burgeoning technology landscape, one widely supported by the emergence of cybersecurity as a significant driver of technology sector performance.
ITEQ follows the BlueStar Israel Global Technology Index. That benchmark “includes Israeli companies, irrespective of listing venue, operating in industries ranging from information technology to biotechnology, defense and security technology, and clean energy technology,” according to BlueStar.
Why It's Important
Crossing assets under management milestones is nice for ETFs, particularly those issued by smaller providers and those with refined investment concepts. What should be important to advisors and investors is the credibility and potential of the fund's investment thesis.
ITEQ has plenty of that. Over the past year, ITEQ is higher by almost 41%, making the 14.90% returned by the MSCI Israel Index over that span seem paltry by comparison.
ITEQ's 12-month run also dispels the notion that there haven't been any ex-US developed market opportunities worth seizing. Speaking of ex-U.S. developed markets, ITEQ is beating the MSCI EAFE Index, of which Israel is a small part, by a margin of more than 3-to-1 over the past year.
Importantly, ITEQ is bringing some flair to the $100 million, having surged 8.51% since the start of this year.
Betting against ITEQ would appear premature at this point, if not ill-fated. With cloud, cybersecurity and semiconductor stocks expected to perform well this year, ITEQ is well-positioned to benefit from those trends with a more than 60% weight to software and chip makers.
Then there is consolidation, ITEQ is chock full of would-be buyers and potential acquisition targets at a time of expected consolidation in Israel's technology sector.
“The past decade has been very good to Israel's high-tech industry, which saw 1,210 mega-deals amounting to 385 billion shekels ($111 billion), high-tech industry data research firm IVC-Meitar said this week,” reports Israel Hayom.