iShares launches first UCITS ETF accessing Israel’s national index

Jan 25th, 2016 | By | Category: Equities

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iShares, the world’s largest exchange-traded fund provider, has increased its range of country-specific ETFs domiciled in Europe with the launch of the iShares TA-25 Israel UCITS ETF (TASE LN). The ETF will track the TA-25 index, which offers exposure to the top 25 largest firms listed on the Tel Aviv Stock Exchange (TASE) while using a single holding cap of 10% to prevent over-concentration in any single company. It is rebalanced twice a year.

Launch of iShares Israel ETF opens access to largest Tel Aviv-listed companies

The iShares TA-25 Israel UCITS ETF invests in the largest 25 companies listed in Tel Aviv (pictured).

Yossi Beinart, TASE Chief Executive Officer, commented: “The launch of this ETF will provide an opportunity for global investors to invest in the Israeli economy through the TA-25 index. This unique collaboration will increase TASE’s exposure to international investors, who are seeking ways to invest in the Israeli market. We will continue to promote partnerships with leading international financial institutions, develop new products and be responsive to local and global market needs.”

Israel was among 29 economies surveyed by the Organization for Economic Cooperation and Development as entering recession following the 2008 financial collapse. However, despite the geopolitical instability in the area, which could deter businesses, investors and customers, it subsequently became the country with the shortest downturn among the group of 29. Its relative resilience has been attributed to disciplined fiscal and monetary policies leading up to the crisis as well as tough restrictions imposed on financial institutions. Such focus on prudent economic and financial management may serve to benefit investors using the iShares TA-25 Israel ETF in future global financial crises.

Alex Pollak, Head of Israel at BlackRock, commented: “Investing with precision has never been more important. Israel’s equity market was one of the fastest developed economies to rebound after the financial crisis, and our fund is a cost-effective way to invest in this resilient market and one of the world’s leading technology centres.

“This is the first exchange traded product that allows investors to invest directly in Israel’s national index in a UCITS framework. This innovation will provide investors based outside of Israel with targeted portfolio exposure to the country.”

As of 19 January 2016, the fund is invested primarily in the health care (30.8%), financials (28.9%), materials (9.0%), energy (8.6%) and telecommunications (8.3%) sectors. There are 25 constituents within the ETF of which the top holdings are Teva Pharmaceuticals (11.2%), Perrigo (10.6%), Bank Hapoalim (8.8%) and Bank Leumi (8.7%). The fund carries a total expense ratio of 0.60%.

The iShares TA-25 Israel UCITS ETF has been listed on the London Stock Exchange where it is on offer in USD-denominated and GBP-denominated (Ticker: ISRL) share classes. The fund is also listed on Deutsche Boerse where it trades in euros (Ticker: QDVM).

Gillian Walmsley, Head of Fixed Income and Listed Products, London Stock Exchange added: “London’s role as an international financial centre is mirrored in its ability to provide investors with access to asset classes around the world. Today’s first London-listed Israeli ETF is a significant achievement for London Stock Exchange and for investors, allowing them the opportunity to have direct exposure to Israel’s dynamic, fast growing and entrepreneurial economy. ”

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