Nordic markets beat MSCI even in the Corona period

7 September 2020 - Norway, Sweden, Denmark and Finland have so far coped with the corona crisis better than the other European countries. The Nordic stock market barometer MSCI Nordic has outperformed its international counterparts. The region thus continued its long-term outperformance. Over the past 20 years, the Nordic stock markets, measured by the MSCI Nordic, have risen by 230 percent. By comparison, the MSCI World rose 153 percent during this period, while the MSCI Europe rose 129 percent.

Denmark, which has been the best performing country in Europe over the last ten years, was the leader. The country has a strong growth record and is home to some of the best consumer and healthcare companies in Europe. Sweden's special way of dealing with the corona crisis was not reflected in the economic development. The economy there developed similarly to that of the other Nordic countries.

"The resilience of the Nordic markets is based not least on the special composition of the investment universe and the strong sector diversification," says Øyvind Fjell, Portfolio Manager of DNB Fund Nordic Equities. While industrial stocks are more exposed than in the rest of Europe and the rest of the world, consumer stocks would play a slightly smaller role. It is true that the information technology sector, which has recently grown strongly globally, is also less strongly represented in the Nordic countries. However, there are some very interesting, high-growth companies that are currently undercapitalised for the MSCI Nords index, but are likely to be included soon. The resilience of the Scandinavian markets is also supported by good liquidity even in critical phases - both during the financial and the corona crisis. Trading was possible without exception during these phases, with daily turnover of several billion euros.

Another factor contributing to long-term outperformance is the strong focus of the companies on ESG criteria and their contribution to reducing CO2 emissions. Nordics scores very well in terms of the environment, social and corporate governance. At a time when regulatory requirements are forcing investors and asset managers alike to observe sustainability criteria, these factors have been integrated here for quite some time.