Nordic ETF Plays for European Exposure, Minus the EU
August 10th, 2012 at 7:01am by Tom Lydon
For investors who would like exposure to Europe without taking on direct exposure to the Eurozone debt, the Global X FTSE Nordic Region ETF (NYSEArca: GXF) targets four countries from this region. Exchange traded funds tracking countries from this corner of Europe have seen renewed interest, marked by higher-than-normal trading volume.
“These products have all managed to add (roughly) 10% so far in 2012, crushing not only broad markets targeting the continent, but also outpacing various benchmarks from around the world which are generally thought to have much more impressive and better positioned economies,” Eric Dutram wrote for Zacks.com. [iShares Expands International Equity ETF Line]
GXF has 28% of assets targeted at financials, while industrials and health care round out the top holdings. The fund has done well thanks to the various currencies and stronger economies in this part of the world, according to the report. The ETF invests in the economies of Sweden, Denmark, Norway and Finland.
An ETF that has seen unusually high trading volume is the iShares MSCI Sweden Index Fund (NYSEArca: EWD) with about 891,000 shares traded last Wednesday, compared to 205,000 shares seen on average. EWD gas gathered about $23 million more in assets under management over the past month, Dutram wrote. EWD is up 11.6% year-to-date. [ETF Chart of the Day: Norway]
There are encouraging signs that the ECB is taking steps to address the liquidity crisis however, the problems are far from resolution. Most of the Nordic economies are healthy and strong enough to weather the financial crisis going on South of them. For example, Norway is a large natural gas and oil exporter, and is rich with hydropower and minerals.
The Global X FTSE Norway 30 ETF (NYSEArca: NORW) is up 10.13% year-to-date. For the time being, Norway has a growth rate of 2%-3% and is experiencing growth from consumer spending and a recovering housing market, reports Neena Mishra in a separate report for Zacks. [The Most Popular New ETFs]
All of the Nordic economies have weathered the global downturn and remain comparatively healthy. There are no guarantees that this health will continue, especially if the Eurozone debt crisis becomes more intense.
Global X FTSE Nordic Region ETF
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.