ETF to Track Herring Index

A Nordic Fund? Really? I didn’t think there was anything up there except Aquavit, herring and a lot of depressed Swedes. Yes, Nokia is from Finland, but is that enough to build an ETF around?

Well Global X Management thinks so. The New York-based asset manager today launched the Global X FTSE Nordic 30 ETF (GXF) on the NYSE Arca. It’s the first ETF in the U.S. to offer diversified access to the largest companies in Sweden, Denmark, Finland, and Norway. The ETF tracks the FTSE Nordic 30 index, which holds the 30 largest and most liquid companies in the Nordic region.

As of July 31, the FTSE Nordic 30 index had a 46% weighting in Sweden, 20% in Denmark, 17% in Norway, and 17% in Finland. The top sectors in the index are financials (28%), industrials (16%), technology (15%), health care (8%), and oil and gas (8%). Nordea Bank of Sweden, Novo-Nordisk of Denmark, and Nokia make up the largest companies in the index. I have officially nicknamed this the Herring Index.

I’m sure many people share my view and aren’t shocked it took this long to make a Nordic ETF. And probably many think this smacks of the resurgance of the niche ETFs. Yet, while the U.S. stock market is pretty much in that exact same place it was about 10 years ago, Globax X says the Nordic region has stood out in the developed Europe region. As of July 31, over the last five years the FTSE Nordic 30 Index’s return of 56.5% outperformed the FTSE Developed Europe Index’s return of 33.0% Year to date, the Nordic 30 has posted a 34.9% return vs. Developed Europe’s 19.3%. Not quite sure what all those Swedes are depressed about. Maybe they should lay off the Aquavit. And how did the land of opportunity, corporate theft, corruption and massive bailouts do over the last five years? As of July 31, the S&P 500 index posted a -0.7% return. Year-to-date, the S&P is up 11.0%. Maybe we should all be eating some herring here.

According to Global X, Sweden, Denmark, Finland, and Norway are members of a select group of 15 countries that receive top AAA ratings with stable outlooks from Standard & Poor’s. The firm reports that World Economic Forum’s most recent Global Competitive Report ranks Denmark, Sweden and Finland as third, fourth, and sixth, respectively, for global competitiveness. They also hold the top three positions in higher education and training.

“In our view, the Scandinavian region offers a stable macroeconomic environment and a unique economic model that has historically produced higher returns than its European neighbors,” said Bruno del Ama, Global X chief executive in a written statement.

This is the second ETF from Global X. On Feb. 5, 2009, it launched the Global X/Interbolsa FTSE Colombia 20 ETF (GXG). Through July 31, it has returned 64.7%.


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