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Israel, the Innovator

The 4 Core Reasons to Consider Investing in Israel

(Continued from Prior Part)

2. Innovation In Spades

Israel’s economy is rated by the World Economic Forum as one of the most innovative in the world. Israeli companies have also been extremely successful in turning geographical and geopolitical challenges to commercial advantage, with Israeli firms holding leadership positions in fields such as cyber security and wastewater reclamation and desalination.

With massive data breaches hitting the headlines in the United States and other developed economies, the world market for cyber security software and services has been growing very rapidly. Israeli companies have enjoyed a competitive advantage due to a strong three-way flow of information among the military, industry and academia on emerging cyber security threats. In 2011 the Israeli government established the National Cyber Bureau to help coordinate collaboration among the military, education and business sectors to protect critical web-based infrastructure from cyber terrorists and criminals alike.

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The result has been an explosion of interest in new cyber security ventures in Israel, with nearly $400 million invested in 78 companies over the past four years.

In the water conservation and treatment sector, Israeli companies have similarly succeeded in turning threat to advantage. Lacking plentiful fresh water, Israel has installed technologies that enable 86% of wastewater to be reclaimed for agriculture – the highest percentage in the world. On the back of this domestic experience, Israeli firms have built a strong presence as exporters of drip irrigation products, which reduce agricultural water consumption significantly. Expertise in these areas – and others such as medical devices and biotechnology – has fueled an upsurge in foreign direct investment into Israel in recent years. This stood at $4.4 billion in 2009 and climbed to $11.8 by 2013: almost a third of the investment came directly from the United States. According to Israel’s largest business information group, BDICoface, Israeli companies are in the front rank of entities registering U.S. patents – more than 3,500 in 2014, up 21% on the previous year.

Market Realist – Israel, the innovator

Since the rise of the personal computer, Israel (ISL)(EIS) has contributed significantly to the technologies that are transforming humanity. The country’s second only to the United States when it comes to providing products to fight cyber crime. Close to 200 Israeli companies specialize in cyber security, accounting for $3 billion worth of anti-hacking exports in 2013.

Check Point Software Technologies (CHKP) is Israel’s biggest tech firm. It trades on the NASDAQ (QQQ). Check Point is the world’s leading firewall provider, and its share price has more than doubled over the last five years.

CyberArk (CYBR) was Israel’s largest private cyber-security company until its successful IPO in September 2014. It makes the privileged-account security solutions used by almost half of Fortune 100 and by many of the world’s largest banks. CyberArk’s share price has skyrocketed. It currently stands at $45 per share after opening at $13 during its IPO.

This article was originally published for MarketViews by dianomi ltd

IMPORTANT INFORMATION

PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS

Closed-end funds are traded on the secondary market through one of the stock exchanges. The Fund’s investment return and principal value will fluctuate so that an investor’s shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value (NAV) of the fund’s portfolio. The Net Asset Value (NAV) is the value of an entity’s assets less the value of its liabilities. The Market Price is the current price at which an asset can be bought or sold. There is no assurance that the Fund will achieve its investment objective.

International investing entails special risk considerations, including currency fluctuations, lower liquidity, economic and political risks, and differences in accounting methods. These risks may be enhanced in emerging markets countries. Concentrating investments in the Israel region subjects a Fund to more volatility and greater risk of loss than geographically diverse funds. Equity stocks of small and mid-cap companies carry greater risk, and more volatility than equity stocks of larger, more established companies.

Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI” Parties) expressly disclaims all warranties (including without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages (www.msci.com).

In the United States, AAM is the marketing name for the following affiliated, registered investment advisers: Aberdeen Asset Management Inc., Aberdeen Asset Managers Ltd, Aberdeen Asset Management Ltd and Aberdeen Asset Management Asia Ltd, each of which is wholly owned by Aberdeen Asset Management PLC. “Aberdeen” is a U.S. registered service mark of Aberdeen Asset Management PLC.

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