Investing in the Nordic Region through the Fidelity Nordic Fund



What is the Nordic region?

The Nordic region consists of five countries and their autonomous regions in Northern Europe and the North Atlantic. These five countries include the following:

  • Denmark
  • Finland
  • Iceland
  • Norway
  • Sweden

We should note here that this not a political bloc but a sociocultural one. But what would be the need of carving out a separate region when securities from these countries are well represented in Europe-focused mutual funds? These five countries are socially and culturally more closely connected with one other than the rest of Europe.

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The Fidelity Nordic Fund

The Fidelity Nordic Fund (FNORX) is one instrument that could help you invest in countries from the Nordic region. FNORX invests at least 80% of its net assets in securities of Danish, Finnish, Norwegian, and Swedish issuers and other investments that are tied economically to the Nordic region. Fund management can invest up to 35% of the fund’s assets in any industry that accounts for more than 20% of the Nordic market.

The fund has been around for a long time, having been launched in November 1995. As of the end of October 2015, it was managing assets worth $405.7 million. As of the end of September, FNORX had a total of 42 holdings in its portfolio.

Sectoral breakdown and performance of FNORX

FNORX is not concentrated in any one of its top four sectors out of its total of eight, and it doesn’t invest in the telecommunications services and utilities sectors.

According to the latest available sectoral breakdown with us, industrials make up one-fourth of the fund’s total portfolio. The consumer discretionary sector makes up just a little less than one-fifth of the fund, followed by the healthcare sector, which makes up 17.5% of the fund’s total assets. Financials and consumer staples round-off the top five sectors that the fund invests in.

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Stocks from Sweden make up over half of the fund’s portfolio, followed by Denmark, which form 22.6%, and Finland, which forms 15.4% of the portfolio. Novo Nordisk AS (NVO), and Series B shares of Carlsberg AS (CABGY) are among the top ten stock holdings of FNORX. Another notable Denmark-based company, Novozymes AS (NVZMY), also forms part of the fund’s holdings, whereas some of the most popular companies from the region—Nokia Corporation (NOK), Statoil ASA (STO), and Ericsson (ERIC)—don’t find a place in the portfolio at all.

For the YTD (year-to-date) period that ended on November 27, the fund rose by 7.7%, whereas over the one-year period that ended on the same date, it gained by 3.6%.

Fees and minimums of FNORX

FNORX requires a minimum initial investment of $2,500. There’s no minimum amount that you need to invest in order to add to your account. The fund does not levy a sales load, but it does charge a redemption fee of 1.5% of the amount redeemed if such a request is placed within 90 days of purchase. The turnover of the portfolio is quite high, but the expense ratio is comparatively low at 0.99%.

We’ll take a look at the Matthews Korea Fund Investor Class (MAKOX) in the next part of this series.


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