Published On: Wed, Oct 1st, 2014

Aberdeen Israel Fund Sees Slow Summer, Gains for the Year

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While the conflict in the Middle East, including the military operations between Israel and Gaza, and ongoing problems in Iraq and Syria, provided obstacles for companies in the region and Middle Eastern Funds, the Aberdeen Israel Fund (ISL) reported gains for the year, in spite of the declines over the summer.

The Fund has a close to equal weighting, around 20%, each of financials, healthcare and information technology companies. Materials and consumer staples make up around 13% each of holdings, while the fund has single-digit percentage exposure to telecommunications, industrials and consumer discretionary, with 2.3% cash. Its largest holdings include: Teva, CheckPoint, and Perrigo. It has $82.1 million assets under management and its NAV share price is around $20.

As of late August, its share price was down 3% in the last month, but has seen a 4.2% gain year to date and a 21.9% gain year over year, which far surpasses its total return for the past ten years of 10.3%. The data is consistent with the drop in Middle Eastern funds in August, when the situation in Syria escalated and U.S. Secretary of State John Kerry discussed the possibility that chemical weapons were being used in Syria.

With the end of hostilities in Israel, at least for the time being, it is possible the Aberdeen Israel Fund will return to its positive movement upward, although the aftermath of the Gaza conflict has left a significant amount of government debt, and the impact on companies represented by the Fund is uncertain.

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