An ETF that invests in Finland rallied 4% on above-average trading volume Tuesday after Microsoft (NasdaqGS: MSFT) announced a $7.2 billion to purchase Nokia’s (NYSE: NOK) wireless device business.

Nokia is the second-largest holding in iShares MSCI Finland Capped ETF (NYSEArca: EFNL) at 10.6% of the portfolio. The fund is relatively small with about $9.7 million of assets.

The Finland ETF was up 31% for the year ended Aug. 29. [The Good and the Bad of the Finland ETF]

EFNL charges an expense ratio of 0.53% and is currently paying a 30-day SEC yield of 3.51%.

On Tuesday, Microsoft said it would buy Nokia’s devices and services businesses, including the smartphone and basic phone divisions. Nokia’s U.S.-listed were up 32% in afternoon trading. Meanwhile, Microsoft shares dropped 5% as investors reacted negatively to the deal.

“We think this is an important step in Microsoft’s evolution into a devices and services company, although execution will be the key,” said Morningstar analyst Norman Young in a note Tuesday.

“Strategically, we believe this move makes sense for Microsoft as it relates to the company’s recently unveiled devices and services strategy,” he added. “Previously, the Microsoft-Nokia partnership resembled a three-legged race, as hardware, software, and marketing from two different firms tried to march in lockstep. As Microsoft looks to build on its presence in smartphones, we think this deal should help reduce the strategic frictions, provided the combination and cost-cutting go smoothly.”

Last month, Microsoft said Chief Executive Steve Ballmer planned to retire within a year. [Microsoft Rally Boosts Tech ETFs as CEO to Retire]

iShares MSCI Finland Capped ETF

Full disclosure: Tom Lydon’s clients own MSFT.

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