Broadly speaking, November was a good month for stocks in the U.S. and many global markets. Last month, 19 of 25 developed markets and 13 of 19 emerging markets found within the S&P Global Broad Market Index (BMI) trader higher, according to S&P Dow Jones Indices.
With the United States Brent Oil Fund (NYSEArca: BNO) and the United States Oil Fund (NYSEArca: USO) down 14% and 11.6%, respectively, over the past month, it is not surprising that some of the worst ex-U.S. markets last month were major oil-producing countries.
Among developed markets, Norway was by the far worst performer last month with stocks in the Nordic nation sliding almost 9.1%, according to S&P Dow Jones Indices. The Global X MSCI Norway 30 ETF (NYSEArca: NORW) stood out in November and for all the wrong reasons.
NORW slid 7.4% while the iShares MSCI Sweden ETF (NYSEArca: EWD) gained 3.6% and the Global X FTSE Nordic Region ETF (NYSEArca: GXF) gained 1.1%. [Going Nordic With ETFs]
NORW’s woes and those of Norwegian stocks in general boil down to Norway’s status as one of the world’s largest non-OPEC, developed market oil producers. Only two non-OPEC producers – Russia and Mexico – depend on oil for a higher percentage of government revenue than Norway does, according to Quartz.
Oil production drives about 30% of government receipts in Norway, barely less than in OPEC member Ecuador. That percentage is also far greater than oil’s contributions to government revenue in Canada and the U.S., also two of the largest developed market oil producers. [Oil Plagues Frontier Markets ETFs]
Putting NORW’s November slide into context, investors looking for somewhat conservative exposure to Europe could have done far better with ETFs tracking Germany, Switzerland, Finland, the Netherlands and Belgium in addition to EWD, Sweden ETF.
So severe was the decline in Norwegian stocks last month that although Mexico depends on oil for a greater percentage of government receipts than does Norway, the iShares MSCI Mexico Capped ETF (NYSEArca: EWW) was down less than 4%, a performance that looks good when measured against NORW.
Still, some emerging markets and the corresponding ETFs felt the wrath of lower crude prices last month. The average loss for stocks in Russia and Colombia was 11.1% last month. Russia is the largest non-OPEC producer and Colombia is South America’s third-largest oil producer behind Brazil and Venezuela.
The Global X FTSE Colombia 20 ETF (NYSEArca: GXG) and the Market Vectors Russia ETF (NYSEArca: RSX) lost an average of 12.2% in November.
Global X MSCI Norway 30 ETF
