Germany-based index provider Solactive, and BlueStar Global Investments, a research-focused firm specialising in the Israeli capital markets, have together launched BlueStar Israel Economic Exposure Indexes. The two indexes reflect the division in the Israeli economy between globally-orientated firms and companies primarily focused on serving the domestic economy. Both indexes have been designed to form the basis for future investment products such as exchange-traded funds.
The Solactive-BlueStar Israel Domestic Exposure Index and Solactive-BlueStar Israel Global Exposure Index targets Israeli-linked companies with 70% of their revenue derived from within and outside of Israel’s economy respectively.
The Solactive-BlueStar Israel Domestic Exposure Index and Solactive-BlueStar Israel Global Exposure Index provide investors with two distinct benchmarks for Israeli equities. They may be used as indicators of Israel’s economic cycles and specific economic trends, as well as vehicles to track the potential risk of geopolitical events in the volatile Middle East.
Steffen Scheuble, CEO of Solactive, said in a statement: “By partnering with BlueStar to launch the Israel Economic Exposure Indexes we are introducing a pair of indexes that enable investors to focus on the two distinct parts of the Israeli economy, and make appropriate investment decisions based on the trends from these two benchmarks. Through anticipated products that will track these indexes, investors will be able to participate in the positive influence of both factors driving the Israeli equity markets.”
Steven Schoenfeld, Founder of BlueStar Indexes, added: “We believe that investors in Israel and around the world will find the unique attributes of the Israel Domestic Exposure Index and the Israel Global Exposure Index to be highly useful as performance benchmarks for the two categories of Israeli companies – those that are heavily focused on the global market, and those that derive most of their revenue from the domestic economy. BlueStar is proud to partner with Solactive to bring these innovative indexes to the market, and we are confident that a wide-range of products will be launched tracking these unique benchmarks.”
The Solactive-BlueStar Israel Economic Exposure Indexes utilise the constituents of the parent index, the BlueStar Israel Global Index – Total Investable Market as the basis for their selection universe. The parent index includes all Israeli and Israel-linked companies, regardless of listing venue, with a float-adjusted market capitalization equivalent to at least $50m and 6-month average daily value traded equivalent to at least $200,000. The economic exposure indexes further refines the investable universe to companies that have trailing twelve month revenue greater than the equivalent of $2m at the rebalance selection date.
The index methodologies define a company’s economic exposure by a minimum of 70% of its revenues derived from the target economic zone – revenue from within or from outside of Israel. In addition, the index methodology provides for several diversification and liquidity limitations such as a single issuer cap of 7% and a sector cap of 35%.