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BlueStar Israel Global Index ® Relative Performance Since 2010

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This BlueStar Indexes® Monthly Update covers Israeli equities traded worldwide. The BlueStar Israel Global Index® (BIGI® or BLS:IND on Bloomberg) is used asthe benchmark for our review as it represents the complete opportunity set of Israeli equities. BIGI® is tracked by the NYSE-listed ISRA Israel ETF and by twoTASE-listed ETNs. Israel has one of the world’s most resilient economies, its technology sector is a global innovation leader, and its companies have a globalfootprint. The BlueStar Israel Equity Update provides insight into macro forces, the geopolitical environment in which Israel’s economy operates, and theindividual company investment opportunities that have contributed to Israeli Global Equities’ impressive long-term performance.

BlueStar Israel Equity Review & OutlookOctober/November 2015

Benchmark Period Return

BIGI® 4.71%

MSCI Israel 4.89%

TA-100 5.01%

S&P 500 8.30%

MSCI EAFE 6.58%

MSCI EM 6.41%

Global Equity Benchmark Comparison:October 2015

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TASE-BlueStar Israel Global Technology Index TM

Relative Performance Since 2010

Benchmark Period Return

BIGITechTM 5.01%

Nasdaq-100 11.19%

S&P Global Tech 10.86%

TA- BlueTech 5.77%

EM Internet & E-commerce 18.77%

Global Technology Stock Index Comparison:October 2015

The opinions expressed in this report are those of BlueStar Global Investors, LLC and should not be interpreted as a recommendation to buy or sell any security. Readers should consult with a financial professional before investing.

© 2015 BlueStar Global Investors, LLC

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“On the rebound”November 4, 2015

Israeli Global Equities, as measured by BIGI®, staged a strong rebound in October gaining back some -- but not all -- of September’s steep declines.

BIGI® rose 4.82% in October, but still remains well-off the all-time highs reached in July. BIGI’s October gain lagged the more than 8% upside move in most developed equity market indexes.

All 10 of the sectors tracked by BIGI™ rose during the month, with the high beta information sector predictably leading the gains. The energy and consumer discretionary sectors barely eked out gains in October, the former held back by weak oil and natural gas prices and no resolution on domestic natural gas issues and the latter hurt by weakening consumer confidence in the wake of an upsurge in Palestinian attacks in Jerusalem and elsewhere.

(Commentary continued on following page.)

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BlueStar Israel Equity Review & OutlookOctober/November 2015

Source: BlueStar Global Investors LLC; Currency-Adjusted returns in dollar terms

Top Israeli Equity Gainers and Losers: October 2015

Top-Performing Israeli Stocks Worst-Performing Israeli Stocks

Alcobra Ltd 37.91% Macrocure Ltd -57.86%

Wix.Com Ltd 26.98% Jerusalem Economic Corp -27.65%

Ceva Inc 25.85% Telit Communications Plc -24.89%

Mellanox Technologies 24.66% Solaredge Technologies -19.33%

Silicom Limited 22.58% Crossrider Plc -18.59%

Shufersal Ltd. 20.84% Medgenics Inc -16.24%

Compugen Ltd 19.73% Pluristem Therapeutics -12.64%

Cellcom Israel Ltd. 18.97% Redhill Biopharma -12.39%

Delek Energy Systems 17.83% Fox Wizel -11.91%

Kamada 17.49% Protalix Biotherapeutics -11.86%

GICS Period Contribution

Info Technology 1.84%

Health Care 1.24%

Telecom. Services 0.49%

Materials 0.34%

Financials 0.30%

Industrials 0.20%

Consumer Staples 0.12%

Utilities 0.10%

Energy 0.08%

Consumer Discretionary 0.02%

Israeli Equity Sector Contributionto BIGI® Performance: October 2015



The strong performance of BIGI® masked a high level of dispersion within the index. The best performing stock gained 37.9%while the worst performer declined 57.7%. We expect index volatility to remain high as Q3 2015 earnings season commences.We got a peak of what’s in store as several Israeli Global Technology companies suffered steep declines after pre-announcingearnings late in September. The market appears to be in an unforgiving mood when companies miss forecasts or project lowerthan expected near-term revenue and earnings growth rates .

The Bank of Israel (BoI) left interest rates unchanged at 0.10% for November and the central bank governor all but ruled outany near-term rate cuts or quantitative easing. This position is somewhat surprising given that inflation remains well below theBoI’s 1% - 3% target, exports continue to decline and the shekel continues to appreciate against both the dollar and euro.Private consumption remains a bright spot in the economy but the BoI noted that “the wave of violence may have an effect onprivate consumption and tourism” if it is not contained.

BlueStar Bottom Line: We remain cautious on the Israeli economy’s growth prospects and are particularly concerned aboutthe continued decline in exports, the primary growth driver for the economy. That, combined with a muted growth outlook inIsrael’s main export markets suggest that many Israeli companies will have difficulty increasing earnings over the next severalquarters. From a technical perspective however, Israeli Global Equities as measured by BIGI® and TA-BIGITechTM rebounded offkey support last month indicating that Israeli Global Equities have likely found a short-term bottom.

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Market Trends &Technical Analysis: BIGI®



The strong support and resistance areas in the longer-term chart above continue to be reliable technical indicators for BIGI®. In lateSeptember the lower set of upward sloping orange trend lines on the longer-term chart above, which connect the 2009 lows with thelate 2012 lows, held as major support for the index at the lower end of the “strong support area”. On the shorter-term chart below,the parallel green lines originating at the 2011 peaks held as support. BIGI® rebounded off these support levels by nearly 5% inOctober and began November on a bullish note. If those support levels are broken we see the next short-term support level between245 and 255. The next short-term resistance is 295.

StrongSupport Area

StrongResistance Area

StrongSupport Area


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Market Trends &Technical Analysis: BIGI®

As long as the 50-day moving average is below the 200-day movingaverage, and the 50-day moving average is downward sloping wewill remain cautious on the outlook for BIGI® even though criticalsupport levels held in September.

From the shorter-term moving averages itappears that BIGI® is poised to test the 100-day moving average in a short-term rally as ithas broken through and held above the 30-daymoving average.

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Market Trends &Technical Analysis: BIGITechTM



Israeli Global Technology Equities, as defined by the TASE-BlueStar Israel Global Technology IndexTM, are displaying a similartechnical pattern as BIGI®. Both indexes tested and bounced off of key support levels in September and rallied in October. For TA-BIGITechTM, if the September lows are broken, there is an additional layer of support at the lower of the double horizontal supportlines at around 175. If that level is broken the next support level would be around 160. On the upside, the only clear resistancepoints would be at 210, where the index broke down from in August and September, then 225 which is the index’s all-time high.

StrongSupport Area


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Market Trends & Technical Analysis: Israeli Shekel vs U.S. Dollar

We believe the BoI is comfortable with the USD/Shekel rate at or slightly below the $0.25 level given its stated desire toencourage exports in order to support growth. Our technical analysis suggests a near-term range of $0.24 - $0.26. Breaksabove or below those levels would support a further move in the continuation of the break.

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Israel: the Go-To Destination for Global Technology Companies



In this monthly feature we highlight the attractiveness of the Israeli technology sector by noting significant recent capitalmarkets and M&A activity which demonstrates that Israel is a key destination for global companies seeking to acquire cutting-edge technologies.

• Israeli networking and data infrastructure provider Silicom will acquire ADI Engineering, a privately-held, US-based provider of high performance Intel-based products targeted at the internet of things, cloud computing and virtualization markets.

• European satellite operator Eutelsat Communications and social media giant Facebook are working jointly to deliver satellite broadband Internet to connectivity-hungry sub-Saharan Africa using an Israeli satellite. The firms have reached a multi-year agreement with satellite communication firm Spacecom to use the entire broadband payload of the AMOS-6 satellite due to come on stream in 2016.

• CyberArk Software signed a definitive agreement to acquire privately held Israeli software company ViewFinitiy Inc.which provides Windows least privilege management and application control software. The acquisition is for $30.5 million in cash.

• Telit Communications won a contract valued at $30 million to supply CDMA 450 MHz modules to a leading global electricity meter manufacturer for a smart electrical network project in the Netherlands. Telit's internet of things modules are at the core of a new generation of smart electricity meters that Dutch utility companies will deploy nationwide over five years starting in 2016.

• FIMI Opportunity Funds, an Israeli private equity firm, is bringing a partner into Rivulis Irrigation (formerly the water division of John Deere). The new partner, Indian company Dhanna Engineering is acquiring 20% of Rivulis for $34 million, while FIMI will retain the remaining 80%. The deal reflects a $170 million value for Rivulis, six months after FIMI acquired Rivulis for $60 million.

• Novartis International is investing an additional $15 million in Israeli stem cell company Gamida Cell. Based in Jerusalem, Gamida Cell develops cellular and immune therapies for the treatment of cancer and orphan genetic diseases.

• U.S.-based Gilbarco Inc. acquired Israeli marketing intelligence company Odysii Technologies Ltd. Tel Aviv-based Odysiihas pioneered an analytics and consumer messaging platform at the point of purchase designed to be integrated with the point of sale, loyalty programs, mobile phones, and other consumer applications. No financial details were disclosed but the deal is reportedly worth $30 - 40 million.

• Israeli geothermal energy developer Ormat Technologies Inc. signed a strategic collaboration agreement with Japan's Toshiba Corp. in geothermal power generation systems and related equipment. The two companies will explore and develop strategic opportunities that will enable them to offer potential customers a more competitive solution for comprehensive supplies and services related to geothermal developments, from resource assessment, field development, power plant engineering, procurement and construction to power plant operation.

• Microsoft will buy Israeli cyber security company Secure Islands for a reported $100-150 million. The acquisition will be Microsoft's fifth Israeli acquisition this past year and its third acquisition of an Israeli cyber security company over thatperiod.

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