Harvard Sells Israeli Holdings: Why?

by: Jeff Diercks

What does Harvard know that the rest of us do not? According to the Globes-Online.com:

The Harvard Management Company notified the US Securities and Exchange Commission (SEC) on Friday that it had sold all its holdings in Israeli companies during the second quarter of 2010. No reason for the sale was mentioned. The Harvard Management Company manages Harvard University's endowment.

Harvard Management Company stated in its 13-F Form that it sold 483,590 shares in Teva Pharmaceutical Industries Ltd.(Nasdaq: TEVA) for $30.5 million; 52,360 shares in NICE Systems Ltd.(Nasdaq: NICE) for $1.67 million; 102,940 shares in Check Point Software Technologies Ltd.(Nasdaq: CHKP) for $3.6 million; 32,400 shares in Cellcom Israel Ltd. (NYSE:CEL) for $1.1 million, and 80,000 Partner Communications Ltd.(Nasdaq: PTNR) shares for $1.8 million.

Harvard Management Company's 13-F Form shows some interesting investments. Its two largest holdings, each worth $295 million, are in iShares ETFs, one on Chinese equities, and the other on emerging markets. Harvard also owns $181 million in a Brazilian ETF.

Could it be our friends in Washington are once again taking care of their own to the exclusion of the little guy? Certainly if there was going to be some kind of military action by or against Israel, this could be bad for stock holdings in Israeli companies.

A review of the weekly chart of the iShares MSCI Israel Capped Investable Market Index (NYSEARCA:EIS) shows distribution has been occurring in this ETF. The question is whether this distribution is more than the broad market averages are experiencing at present. You can see on the relative performance chart that follows that EIS has been weaker than the EAFE Index until the last two weeks.

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Maybe Harvard decided to get out while there was a brief period of relative outperformance and before any conflicts might arise in the Middle East between Israel and Iran.

Disclosure: No positions