Military tensions haven't hurt stocks in the country.
Chart courtesy of StockCharts.com
Despite the ongoing conflict in the region, Israeli equities are proving resilient. Over the past 200 days, Israeli equities have handily outperformed the MSCI EAFE Index—a broad barometer of developed-market equities—to the tune of 7 percent.
Since July 1, when the most recent conflict erupted, the iShares MSCI EAFE ETF (EFA | A-91) has slid half a percentage point, while the iShares MSCI Israel Capped ETF (EIS | C-47) returned nearly 1.5 percent.
EIS tracks a plain-vanilla index of Israeli equities, and caps individual holdings at 24 percent; it only includes equities that trade on the Tel Aviv Stock Exchange.
The other ETF for exposure to Israeli equities is the Market Vectors Israel ETF (ISRA | C-32), which takes a more expansive view of Israeli equities: In its eligible universe, ISRA includes not only equities traded in Tel Aviv, but also companies deemed to be Israeli by the BlueStar Index Advisory Committee.
ISRA caps individual holdings at 12.5 percent, which, combined with its more expansive eligibility criteria, produces an all-around larger and less-concentrated portfolio.