Oil has made Norwegian stocks the region’s worst performers in recent months. Over the past three months, the comparable Denmark ETF has posted a slight gain while the comparable Finland ETF has notched a modest loss. The iShares MSCI Sweden ETF (NYSEArca: EWD) has tumbled 5.6%, but that less than half as bad as the losses incurred by ENOR and NORW over the same period. [Country ETFs Crushed by Oil]
ENOR allocates nearly 30% of its weight to the energy sector, or more than 800 basis points more than its weight to financial services stocks, the ETF’s second-largest sector allocation. NORW, the bigger and older of the two Norway ETFs, has an energy sector weight of 32.3% at the end of the first quarter. That is roughly 60% larger than ETF’s weight to the financial services sector.
“If the government has to withdraw money from its $875 billion sovereign wealth fund, it will be a historical step. It’s either that, or heavily rein in fiscal spending at a time when the country needs it most. The state’s spending could start to outstrip income from oil, which it pours into its wealth fund for future generations,” according to Bloomberg.
Global X MSCI Norway 30 ETF