ARK Israel Innovative Technology ETF: Better than ARKK (IZRL)

The pursuit of disruptive innovation, where returns and future themes go hand in hand, continues to attract the interest of global groups of investors. the ARK Israel Innovative Technology ETF (Bat: IZRL) is a box trying to track Disruptive innovation emerging from Israel’s fast-growing technology sector. How does he do this? By seeking to track the ARK Israeli Innovation Index. This index attempts to provide exposure to companies driving disruption in Israel and around the world within five innovation platforms: genetic engineering and genomics, healthcare innovation, biotechnology, industrial innovation, and Internet and IT. The fund does this with an expense ratio of 0.49 percent.

Holding ETFs

One of the nice things about this box is the way the top properties are set up. I personally don’t know any of these companies except Wix.com, Teva, and Fiverr, but here’s why You consider ETFs like this. No position makes up more than 2.69% of the fund, making this a well-diversified fund overall.

Sector composition and weights

IZRL’s sector composition is heavily concentrated in information technology, which is the fund’s largest weighting at 56.1 percent. Health care at 14.0 percent, communications services at 11.4 percent, industrials at 9.8 percent, consumer discretionary services at 6.5 percent, and consumer staples at 2.0 percent. This broad sector composition could allow the Fund to capture benefits from the many aspects of disruptive innovation I discussed previously, from medical discoveries to new digital communications and automation for the industrial sector.

One thing worth noting about the sector composition is the overall market cap weights. The bulk of this fund is in the small cap space, which, as we know, has been a challenging part of the market since 2021. This could be a good thing if small caps outperform large caps in the next cycle.

Peer comparison

There are no pure competitors I can find to IZRL, which is strictly aimed at investors looking to get exposure to Israeli technology. Having said that, we can compare it to the non-Israeli specific and more general ARK Innovation ETF (ARKK). When looking at the price ratio, IZRL has outperformed and looks like it may want to continue doing so.

Pros and cons of investing in IZRL

In recent years, Israeli companies have led many technology trends in the world, especially in cybersecurity, medical technology and software development. This is a good fund to have exposure to that. Furthermore, because its stock allocation is so diversified, IZRL investors are not overly exposed to any particular company. This diversification reduces downside risks.

But there are risks. the main? Geopolitical instability in the region: Israel’s location in a historically unstable region of the world means that political unrest, or war and conflict, could make IZRL shares less valuable. Investors considering buying into it should be prepared for market turmoil and geopolitical risks. The other risk is that investing in a country-specific fund like this means you’re putting your money in the hands of only one group of innovators, and while Israeli technology can be very innovative, it’s a very small part of the broader market. In other words, the fund’s performance is closely linked to the performance of entrepreneurs and companies in Israel. If any bad news hits the Israeli technology sector as a whole, the fund could suffer.

Conclusion

Overall, I would say that the ARK Israel Innovative Technology ETF is unique. It provides investors with targeted access to Israeli technology stocks. IZRL’s strategic investment approach is potentially well-suited to discovering future technology trends by focusing on disruptive innovation – in medical technology, cybersecurity and software development. This targeted reach is further emphasized by the fact that IZRL invests only in companies based in Israel. Given its diverse sector composition and fairly low fee burden, IZRL may be an interesting candidate for anyone wanting to add some exposure to Israeli technology stocks to their investment portfolio.

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