5 min read

EIS VS ITEQ: Tracking and Exposure

Overview: EIS Vs ITEQ

When it comes to investing, there are a plethora of options available. Among these, EIS (Enterprise Investment Scheme) and ITEQ (BlueStar Israel Technology ETF) are two distinct vehicles you might consider for diversifying your portfolio. The EIS is a UK-based venture capital scheme designed to encourage investments in smaller, high-risk companies by offering tax relief. ITEQ, on the other hand, is an Exchange-Traded Fund (ETF) that tracks technology companies based in Israel. Understanding the core differences between EIS Vs ITEQ can help you make more informed investment decisions.

Sectors and Top Holdings: EIS Vs ITEQ

The sectors that EIS and ITEQ focus on could not be more disparate. EIS targets a broad array of industries, including healthcare, green technologies, and consumer goods, among others. It's important to note that the companies invested in via EIS are often start-ups or relatively young enterprises. ITEQ, by contrast, is more specialized. It exclusively focuses on the technology sector in Israel, covering a range of sub-sectors like cybersecurity, software, and biotechnology.
The top holdings in ITEQ are generally well-established tech companies like Check Point Software, Nice Ltd., and Wix.com. With EIS, the top holdings are generally private companies that are not as readily disclosed, and they span multiple sectors.

EIS overlap EIS VS ITEQ: A Comprehensive Comparison of ETFs

Capitalization Strategy: EIS Vs ITEQ

Capitalization is another critical aspect that sets EIS and ITEQ apart. EIS primarily focuses on small-cap companies with high-growth potential but accompanied by higher risk. These are often businesses in their early stages or start-ups that have not yet gone public. Therefore, the capitalization strategy is typically long-term and illiquid, given that the investments may take years to mature.
ITEQ concentrates on a mix of capitalizations, including both large-cap and mid-cap companies. The investment strategy is generally more liquid than that of EIS, offering investors the flexibility to buy and sell shares on an exchange.

Tracking and Exposure: EIS Vs ITEQ

When it comes to tracking and exposure, both EIS and ITEQ have distinct methodologies. EIS does not track any specific index but rather relies on the performance of individual companies within its portfolio. This means that the investor's exposure is to a diversified range of sectors but focused primarily within the UK.
ITEQ tracks the performance of the BlueStar Israel Global Technology Index, providing investors with exposure to the tech sector in Israel. By investing in ITEQ, you're essentially buying a piece of a more substantial, diversified technology portfolio, which means your risk is spread out over many companies but within a specialized sector.

Conclusion:
The ultimate choice between EIS and ITEQ boils down to your investment goals, risk tolerance, and preferred sectors. If you're inclined towards venture capital and are comfortable with higher risk for potentially higher returns, EIS may be more your speed. On the other hand, if you're looking for a more liquid investment focusing on the burgeoning tech industry in Israel, ITEQ would be a better fit.

In either case, knowing the nuances between EIS Vs ITEQ can be instrumental in shaping a portfolio that aligns with your financial objectives. Always remember to consult a financial advisor for personalized advice tailored to your individual needs.

EIS ETF issuer
EIS ETF official page

Get started

Try ETF Insider