Experts’ advice: In age of BDS, invest in Israel
Profitability, pure and simple, is reason enough to invest in Israeli businesses, even if there weren’t also the ideological purpose — to counteract the boycott, divestment, and sanctions movement and strengthen the Jewish community. The returns speak for themselves, according to all three of the speakers on a panel at the Alex Aidekman Family Jewish Community Campus on March 8.
The event, hosted by the Professional Advisors Network of the Jewish Community Foundation of Greater MetroWest NJ and the Jewish Federation of Greater MetroWest NJ, was titled “A Conversation about Thoughtful Investing in the Age of BDS.”
The speakers were Izzy Tapoohi, president and CEO of Development Corporation for Israel/Israel Bonds; Steven Schoenfeld, founder of BlueStar Indexes; and Tyler Reiff, portfolio manager of socially innovative investing strategy at U.S. Trust. The gathering was opened by Sandra Weiss, the network’s meeting chair, and moderated by Jay Kaplan, portfolio manager and principal of Royce & Associates.
The PAN brings together family advisers — attorneys, tax and estate specialists, and financial planners — for networking and educational programs in the community.
Tapoohi, an Australian who made aliya in the late 1970s, described the BDS approach as “one massive deception.” It maintains a pretense, he said, of intending to exercise pressure “until Israel complies” with its demands, when in fact it means “until Israel ceases to exist.”
While all three speakers stressed the strength of the Israeli economy, Tapoohi mentioned a limitation. The country, he said, has a well-deserved reputation as a mecca for start-ups; where it doesn’t excel is in the outreach required for business development. “Let’s ensure that we concentrate on our real strengths,” he said.
He pointed out that State of Israel Bonds has evidently done that, generating — over its 60-year history — a reputation for being as safe as U.S. Treasury Bonds.
He suggested that the bonds offer a strategy for those wanting to donate money to their alma mater universities but wary that such institutions might be inclined to boycott Israel. “Israel Bonds can’t be sold,” he pointed out with a big smile, which means the institution can’t shed its connection to Israel.
Schoenfeld left what he described as the relatively safe realm of mainstream finance to establish BlueStar, with its ISRA and ITEQ indices covering technology and various other areas of Israeli entrepreneurialism.
Looking ahead, he warned that there is a need to be wary of — though not overly concerned about — the impact of the sanctions movement on individual companies. He cited as an example Caterpillar. In the United States, the BDS movement has not been successful in pressuring the company, but in Europe they have. “BDS is more about noise and hate than impact,” Schoenfeld said, “but you don’t know when the tipping point might come.”
With an apologetic nod to the coarse tone of recent presidential politics, Schoenfeld summed things up like this: “If you take out the ‘D’ — for divestment — you’re left with what this movement is about — [the B-S]. That’s all it is,” he said.
Audience members appeared to appreciate the message. In a room of clearly like-minded Israel supporters, the questioners asked not for more reasons to invest there, but for deeper detail on how to go about it. Ironically, Reiff said, some of the best guidance comes from the BDS movement itself: Their list of “bad guys” provides investors with their list of “good guys,” those companies that have proved their commitment to Israel. Vice versa, those companies BDS lauds might be the companies to avoid or boycott themselves.
Reiff, in his position with U.S. Trust, which handles private wealth management, is focused on socially relevant investing. In the age of very rapid information flow, negative reports travel particularly fast, he noted, so there is an obligation, he said, to “combat that with positivity,” letting investors know they can support Israel — especially when it comes to intangibles like the people factor there.
One of the most important areas to invest in, he said, is education. Unless those areas affecting children are adequately funded, Israel will not be able to maintain the economic power it has had. And, he pointed out, funding that supports the growth of its education system has the added benefit of making it an attractive place for aliya.