The Israeli economy is strong, growing fast and offers good value, according to William Scholes, investment manager for Aberdeen Asset management. That’s why he believes Israeli stocks, already on an impressive run this year, can continue to swing higher. 'The economy is at an interesting stage now with a new cabinet sworn in. We think at the end of the regulatory tightening cycle it is going to be positive for businesses. We also think the economy is in good shape,' said Scholes. 'Unlike many of the other faster growing economies, Israel does not have structural imbalances that make it more vulnerable to a Federal Reserve rate hike.' The Aberdeen Israel Fund, which Scholes helps manage, is up over 14% year-to-date. The closed-end fund is trading at a 12.5% discount to its net asset value so investors are receiving 100 cents worth of assets for 88 cents. Nearly a quarter of the fund is made up of generic drug-makers Teva Pharmaceuticals and Perrigo. Both companies are locked in a wild M&A affair with fellow pharma Mylan. Luckily for Scholes, the tangled dance between the three companies is lifting the fortunes of his fund. Teva shares are up 5% year-to-date. Perrigo is up over 12% so far this year.
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