A second Israel ETF will come to market Wednesday when the Market Vectors Israel ETF debuts. The new ETF will trade on the New York Stock Exchange under the ticker "ISRA."
ISRA, which will charge 0.59 percent per year, will compete directly with the iShares MSCI Israel Capped Investable Market Index Fund (NYSE:EIS).
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EIS, which turned five in March, has $76 million in assets under management and charges an annual fee of 0.6 percent, according to iShares data. The new Israel ETF will track the BlueStar Israel Global Index.
"Constituent stocks of the Index must have a float-adjusted market capitalization of at least $75 million on a rebalancing date to be eligible for the Index. Stocks whose market capitalizations fall below $75 million as of any rebalancing date will no longer be eligible for the Index. Stocks must have a minimum six-month average daily trading volume of at least $250,000 to be eligible for the Index. No single component stock represents more than 12.5% of the weight of the Index.
"Should a component represent greater than 12.5% of the weight of the Index, the weight shall be modified such that it represents no more than 12.5% of the Index. The cumulative weight of all components with an individual weight of 5% or greater do not in the aggregate account for more than 50% of the weight of the Index," according to a Market Vectors SEC filing.
As of March 1, the index had 94 constituent companies with an average market cap of $1.9 billion. ISRA can include Israeli companies that are not listed in Tel Aviv. Additionally, the new ETF's index ensures the fund will not be dominated by just one or two stocks. Israeli pharmaceuticals giant Teva Pharmaceuticals (NASDAQ:TEVA) accounts for 23.7 percent of EIS, roughly two-and-a-half times that ETF's next largest holding.
EIS is up over 19 percent in the past year. Israel is classified as a developed market by MSCI (NYSE:MSCI).
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