Background: supporting the mission
In dedication to their mission, one Jewish Federation client (the client) includes a requirement to invest in Israel investments in their investment policy statement. The IPS stipulates that a 5% allocation to Israel investments is required in the main portfolio. Prior to 2020, this was accomplished through purchasing Israeli bonds. The client wanted to consider a more comprehensive approach of direct investments. They also wanted to offer a direct Israel investment option for their Donor Advised Fund (DAF) offerings.
Solution: directly support Israel
Our investment manager research team conducted evaluations and reviewed a range of options including active managers and ETF investments. The team presented multiple strategies of direct Israel investments including active management, ETFs with Israel only holdings, and a combination of ETFs with Israel only and S&P 500 exposure. The client consensus was to focus on direct Israel only ETF investments and not incorporate S&P 500 exposure. We recommended that the main portfolio investment include a combination of Israel Bonds and a blend of Israel only ETFs. In addition, a DAF standalone option was added which mirrored the Israel only ETF solution implemented in the main portfolio.
This DAF option allows for donors to directly support Israel and simple implementation through a diversified ETF investment to help mitigate risk and dampen industry concentration. The end result includes DAF options of active managers and ETFs with Israel only holdings. The client is now offering the direct ETF Israel investment as a DAF, and it is also implemented in their main portfolio.
This case study describes the attributes of a specific client that SEI has determined is comparable based on objective criteria, including organizational goals, asset size and industry sector. Any discussion of specific asset allocations is intended to help clients understand SEI’s customized investment approach, and should not be regarded as a recommendation. Information concerning SEI’s recommendations over the last year is available on request. The information expressed herein represents the current, good faith views of SEI at the time of original publication, and has not been updated.