Israel is a nation that’s often misrepresented by the media. Despite its reputation for geopolitical instability, we believe its conflicts don’t diminish the investment potential in this region. However, as neither an emerging market nor a developed nation, it can offer investors the best of both worlds.
The Aberdeen Israel Fund, Inc. (ISL) takes the confusion out of Israel’s seemingly complex socio-economic issues by focusing on its inherent strengths and thriving industries.
Israel’s military is leading a technology battle.
Israel is a startup nation. The same military it relies on for national security is also driving growth in its technology sector. The Israeli government spends more than twice as much of its Gross Domestic Product (GDP) on Research and Development (R&D) compared to the nations of the European Union1, and that often trickles down to the private sector. For this reason, Israel is a hotbed for technology startups and talent. It’s no secret that Israel is the world’s leading provider of firewall technology, an essential part of every corporation’s IT infrastructure.
Another overlooked truth is that Israel is a developed nation with controlled growth, which investors may wrongly perceive as “slow.” But with an International Monetary Fund (IMF) projection of 3% GDP through 2019,2 Israel is on track to exceed the growth of the U.S. and far surpass most European countries. Because of the nation’s strong central bank and conservative spending, its public debt is low compared to its peers.3
In our view, the outlook for Israel over the medium-to-long term is positive. As a center of research and development excellence, foreign investment in Israel continues to be strong. And the country’s young population and wage growth are expected to help increase consumption for years to come. Outside of technology, the nation also continues to see growth in pharmaceuticals, telecoms, banking and retail. These industries comprise the bulk of equity holdings in the Aberdeen Israel Fund, Inc.
Download the Aberdeen Israel Fund factsheet to learn more about the fund’s objective, policies, performance and more.