Embracing Finnish stocks is not a risk-free bet. The country’s economy has contracted for three straight years and sharing a border with Russia is problematic. With that proximity, Russia has previously been a major source of foreign direct investment to Finland, but as the Russian economy has struggled, its inflows to Finland have turned to capital departures.
For investors wanting solid exposure to Finnish stocks, but not the full commitment of an ETF like EFNL, traditional diversified Europe ETFs typically have not been good places to look. That changed earlier this week with the debut of the WisdomTree Europe Hedged SmallCap Equity Fund (NYSEArca: EUSC).
EUSC, the small-cap answer to the wildly popular WisdomTree Europe Hedged Equity Fund (NYSEArca: HEDJ), this year’s top-asset gathering exchange traded fund by a wide margin, has a 13.8% weight to Finnish stocks. That makes Finland the new ETF’s fourth-largest country weight with an allocation nearly 400 basis points larger than that afforded to Spanish stocks. [HEDJ Gets a Small-Cap Cousin]
iShares MSCI Finland Capped ETF
