The woes in Western Europe were greatly documented during the
financial crisis a few years ago. The PIIGS were the countries at
the greatest risk of imploding and affecting the entire
As the continent and the entire world continue to improve
their economic standing, there is one region in Europe that has
been a constant performer.
Scandinavia, made up of Sweden, Norway, Finland, and Denmark,
did not completely sidestep the global recession, however it did
rebound much quicker than the Western European nations. As the
U.S. stock market hits new all-time highs, it is time to look at
other countries around the world that can help diversify a
portfolio. The beauty of ETFs is that the average investor has
several options when if comes to investing in Scandinavia.
iShares MSCI Sweden ETF (NYSE:
The ETF has been around longer than any other that invests in
the region and it has had its share of ups and downs over the
years. Most recently the ETF hit a new two-year high and is on
its way to test a quadruple top pattern that dates back to 2000.
EWD is composed of 33 Swedish stocks with a heavy concentration
on the financials and industrials.
The country's GDP is expected to grow 1.3 percent in 2013 and
increasing to 2.4 percent in 2014. From a technical perspective,
the ETF has struggled to break above the $39 area. Over the last
13 years the ETF has failed to breakout and run into the $40's.
With the ETF currently trading at $35.25, it is time to watch EWD
closely for a potential buy signal in the coming months.
Global X FTSE Norway 30 ETF (NYSE:
The country relies heavy on the energy industry and that is
why 43 percent of the 30 stocks that make up the ETF are in the
energy business. Even though the price of oil has been struggling
lately, NORW has continued to move higher and is currently
trading at the best level in two years.
The GDP in 2013 is expected to increase by only 0.5 percent
before expanding to 2.5 percent growth in 2014. The chart shows a
recent breakout above the $16.25 area and the next level to watch
is the all-time high for the ETF at $18.
iShares MSCI Finland Capped ETF (NYSE:
The economy in Finland has not been as strong as its peers
with the Central Bank predicting the GDP to contract 0.8 percent
this year, followed by an increase of 0.7 percent in 2014. With
that said, the ETF is up 25 percent this year, outpacing both EWD
The 43 stocks that make up the ETF are concentrated in the
industrial, IT, and financial sectors. The ETF has only been
around since January 2012 and the rally this year has put it at a
new all-time high. Technically if the ETF can hold the breakout
level of $32 in the coming weeks it will be a bullish sign for
the remainder of the year.
iShares MSCI Denmark Capped ETF (NYSE:
Slow growth is expected in 2013 with the government expecting
the GDP to expand by 0.2 percent before increasing by 1.6 percent
in 2014. The ETF is the best performer of the group with a gain
of 35 percent in 2013 as it trades at an all-time high. The 38
stocks in the ETF are heavily concentrated in the health care and
industrial sectors with one stock, Novo Nordisk (NYSE:
), making up an eye-catching 21 percent. Any time one stock
accounts for such a high percentage it is a red flag for
investors. From a technical perspective the ETF is overbought and
needs to pull back to the low $40's before it can once again be
considered a buying opportunity.
Because it can be difficult for an investor to decided on
which country is the best option in the Scandinavian region,
Global X has the FTSE Nordic 30 ETF (NYSE:
). The ETF invests in all four countries with the highest
percentage in the Swedish market.
The ETF is up 24 percent this year, falling in the middle of
the four single-country ETFs. Based on reward versus risk, it
appears GXF would be the best bet for the average investor
playing at home.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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