Getting safe haven exposure is almost automatic when looking at bonds and gold, but there’s another option investors may want to consider for added diversification: Norway.
The country’s equities have not only provided a growth component with respect to its economy, but they’ve been strong performers relative to other equity indexes.
“Nordic economies have grown faster than most developed countries and proved to be relatively resilient during the Covid pandemic, despite having some exposure to cyclical sectors,” a Hedge Fund Journal article notes. “Immigration is relatively high, which contributes to population growth especially in Sweden and Norway, and Nordic GDP per capita is amongst the highest in Europe excluding Switzerland and Luxembourg.”
“Historical average returns have been internationally very competitive for long only investors: between 2000 and 2020 MSCI Nordic has outperformed MSCI US, MSCI Europe and MSCI World equity indices,” the article adds.
Norway Exposure in 1 ETF
An easy and efficient way to get access to Norway’s equities is via targeted exposure through an exchange traded fund (ETF). One fund worth considering is the Global X MSCI Norway ETF (NORW).
As per the fund description, NORW seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Norway IMI 25/50 Index. The fund invests at least 80% of its total assets in the securities of the underlying index and in American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) based on the securities in the underlying index. The underlying index is designed to represent the performance of the broad Norway equity universe.
NORW gives investors:
- Efficient access: The ETF represents a broad basket of Norwegian securities.
- Targeted exposure: The fund targets exposure to a single country, but also has diversified exposure in terms of business sectors, with financial, energy, and consumer staples being the top three.
- Semi-annual distributions: NORW has a fixed income component that pays twice a year (2.02% 30-day SEC yield as of March 3).
To highlight its stability, the fund has been steady amid a volatile 2022. While the S&P 500 is down 8.45% so far in the year, NORW has been able to minimize losses — it’s down just 1.7% year-to-date.
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