Israeli Global Equities Reach New Highs in MayJune 8, 2015

Israeli global equities, as measured by BIGI® continued their upward move in May, almost reaching another all-time high before falling off slightly during the last week of the month. In this they largely tracked US and European equity markets which also declined toward month-end on mixed economic data that suggested the U.S. recovery was faltering as well as the pending European creditor showdown with Greece.

BIGI® rose 1.67% in May, closing at 304.05, 1.70% below the all-time high reached in April.

May’s economic data was decidedly mixed. Monthly CPI figures showed some inflation returning to the Israeli economy though the year-over-year numbers remain negative and much of the inflation that is present in the economy continues to come from the uninterrupted rise in housing prices. Unemployment continued to decline, reaching a record low of 4.9%. But, Q1 GDP growth came in at 2.5%, well below the 3.3% consensus forecast, as strong private consumption and exports were offset somewhat by significant weakness in fixed investment and durable goods consumption. The countervailing trends in the economy led the Bank of Israel (BoI) to leave interest rates unchanged at 0.10% for June. (Commentary continued on following page.)

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 Update June 2015

Benchmark Period Return

BIGI® 1.67%

MSCI Israel -0.21%

TA-100 2.05%

S&P 500 1.05%

MSCI EAFE 0.19%

MSCI EM 4.08%

Global Equity Benchmark Comparison:May 2015

®

TASE-BlueStar Israel Global Technology Index TM

Relative Performance Since 2010

Benchmark Period Return

BIGITechTM 1.80%

Nasdaq-100 2.13%

S&P Global Tech 1.77%

TA- BlueTech 1.30%

EM Internet & E-commerce -1.73%

Global Technology Stock Index Comparison:May 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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BlueStar Israel Equity UpdateJune 2015

The four major Israeli banks reported Q1 earnings in May which highlighted both the opportunities and difficulties of operatingin the current economic environment. Banks with the largest exposure to the mortgage market reported stellar results on theback of the continued strong housing market, as high origination volume more than offset the low lending spreads in thisextremely competitive market segment. Banks with less exposure to mortgages continue to fight an uphill battle to replacelower net interest income due to the low interest rate environment. All the banks are focusing on cost-control though this ishampered by their inability to significantly reduce headcount because of the inflexibility of Israeli labor laws.

Somewhat ironically, the new government announced the formation of a commission to study and recommend ways in whichto increase competition in the banking sector. The new finance minister, who “successfully” shook up the mobile telephonymarket to the point that two of the three largest service providers are barely profitable, is known to favor forcing the banks tosell their credit card businesses. Given the nature of these highly politicized government commissions, we do not expect anynear-term changes that will adversely affect the banks’ business models. It would be gratifying if any changes wereaccompanied by labor market reforms that would allow the banks to slash their bloated cost structures which average around70% of net income. The cost/income ratio of the sector is among the highest in the world. Even Russia’s former state-ownedbanks have cost/income ratios between 50% - 60%!

BlueStar Bottom Line: We continue to maintain a cautious view on Israeli Global Equities due to domestic and global economicgrowth uncertainties, turbulence in global credit markets and the inability of BIGI® to decisively move about recent highs.

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

Top Israeli Equity Gainers and Losers: May 2015

Top-Performing Israeli Stocks Worst-Performing Israeli Stocks

Borderfree Inc 121.36% Plus500 Ltd -51.05%

Elbit Imaging Ltd 39.74% Varonis Systems Inc -29.81%

Imperva Inc 33.30% Matomy Media Group Ltd -24.11%

Alcobra Ltd 30.95% Photomedex Inc -16.99%

Opko Health Inc 28.49% Syneron Medical Ltd -15.45%

Wix.com Ltd 27.94% Fox Wizel -15.10%

Attunity Ltd. 22.30% Ezchip Semiconduct -14.91%

Telit Communications 18.92% Allot Communication -13.19%

Naphtha Israel 18.57% Cellcom Israel Ltd. -12.26%

Orbotech Ltd 16.43% Discount Investment Corp -11.85%

GICS Period Contribution

Info. Technology 1.14%

Health Care 0.86%

Energy 0.19%

Consumer Disc. 0.03%

Utilities 0.00%

Industrials -0.02%

Consumer Staples -0.04%

Materials -0.04%

Financials -0.18%

Telecom Servcies -0.25%

Israeli Equity Sector Contributionto BIGI® Performance: May 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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Market Trends &Technical Analysis: BIGI®

Israeli Global Equities broke out to the upside in April when Mylan bid to acquire Perrigo, the second highest-weighted constituent inBIGI®. The breakout brought BIGI® up to the two parallel trend lines in the chart above connecting the 2008 and 2011 market tops.We began focusing on identifying likely resistance areas for the index in January as it had been in an uptrend for nearly two years andthose parallel lines represented major resistance for the index. This resistance was confirmed when BIGI® touched those lines inearly 2014 and again in April, May and early June of this year. While we continue to believe that those resistance lines will be brokenat some point, and turn into support for the next leg in this multi-year bull market, they represent significant resistance until actuallybroken. Despite BIGI®’s grind higher since April, it still has not decisively broken through that major resistance and the index has notmade a new all-time high since early May. That, combined with increased volatility across global asset classes, make us cautious onIsraeli Global Equities in the short-to-medium terms from a technical perspective, and believe a pull-back to the “strong support area”at the 275 level is likely.

StrongSupport Area

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

StrongResistance Area

StrongSupport Area

ST Range Above 50-Day

SMA

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Market Trends &Technical Analysis: BIGI®

In May and early June the shortest term momentum indicator that we use, the 30-day simple moving average, was probedseveral times indicating increased potential for a short-term pull back. In addition, the index seems to have made a short-termdouble top close to the 308/309 level. On the longer term chart below, the 50-day moving average has not yet been testedthough BIGI® appears to be range-bound between the 50-day average at around 302 and the recent highs at around 308. Thisis usually indicative of a sharp move in one direction or another, but given the strength of the resistance above, a break belowthe 50-day moving average cannot be ruled out.

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Market Trends &Technical Analysis: BIGITechTM

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

StrongSupport Area

StrongResistance Area

Israeli Global Technology stocks as defined by the TASE-BlueStar Israel Global Technology IndexTM display similar somewhatstronger technical patterns than the broader BIGl®. As of now the TA-BIGITech® index is simply consolidating near a multi-yearuptrend line with stronger support just below. Weakness in the U.S. and the broader BIGI® index could cause TA-BIGITech™ topull back and we therefore also remain cautious on Israeli Global Technology stocks.

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

The volatility of the Israeli shekel has been a major contributor to the returns of US Dollar-denominated Israeli equity indexesover the past several months. We believe the BoI is comfortable with the USD/Shekel rate at or slightly below the 0.25 levelgiven its stated desire to encourage exports in order to support growth. However, it appears that the double red support linesand the thick black uptrend lines are a source of major support for the shekel so we expect the shekel to remain close to thoselevels in the short- and medium-terms but with limited upside.

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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:

• Medical devices company Medigus, (TASE: MDGS) which develops non-invasive devices as an alternative to surgery for treatment of severe heartburn, filed to list ADRs in the U.S.

• Universal flu vaccine developer BiondVax Pharmaceuticals (TASE: BNDX) raised $10 million and listed its shares on Nasdaq.

• TheraCoat, a developer of treatments for urinary tract diseases, is seeking to raise more than $20 million in coming months as it prepares for an IPO in the U.S. The company’s gel technology allows cancer drugs to stick better to the bladder wall.

• Chinese Internet giant Baidu Inc. (Nasdaq: BIDU) is investing millions of dollars in Israeli content recommendation company Taboola. The content-recommendation platform is expected to hold an IPO within two years.

• Israeli energy savings solutions company eVolution Networks raised $22.5 million from Warren Buffett's Berkshire Hathaway Energy subsidiary IES Holding, and GE Ventures. The company develops energy savings solutions for Mobile Network Operators (MNOs), plans to expand its worldwide presence and promote its solutions to new industries, such as data center energy management. It is Buffett’s second investment in Israel and his first in an Israeli technology company.

• Chip maker ARM is in advanced negotiations to acquire Israeli company Sansa Security for an estimated $75-85 million. The Israeli company has developed security solutions for cellular devices and flash memory.

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