Exchange traded fund (ETF) provider GlobalX today is launching the first pure-play ETF on the Nordic region of the world. The Global X FTSE Nordic 30 (GXF) is the second ETF from the provider, and the first ETF that gives investors access to the Nordic region of Europe. Sweden is the largest country in the fund, with 45.3% of the weighting. Denmark is 19.5%, Norway is 17.3% and Finland is 16.7%.
The fund’s components are the 30 largest and most liquid companies in the Scandinavian region. The top sectors are financials, industrials, technology and health care.
Global X CEO Bruno Del Ama says that from an investor’s point of view, the Nordic region is a stable economic environment. “All the countries are rated AAA. Historically, that region has produced higher returns than its neighbors,” he points out.
Del Ama also points out that these countries have a strong emphasis on higher eduction, training and techonlogy adoption.
An actively managed mutual fund already targets the Nordic region, but the index behind the ETF has been trouncing the mutual fund. The FTSE index has had a 9.4% annualized return in the past five years, compared with the mutual fund’s 7.51% in the same time period, writes Murray Coleman for Index Universe.