Opinion on  PowerShares FTSE RAFI Europe SmallMid Portfolio (PWD)
A NordiCaps Region Index

Nordic Region: Breakdown by Country

As evidence of commercial interest in developing an ETF for the Nordic region, Global X Management has recently filed for such a product, based on the FTSE Nordic 30 Index . The Global X filing specifies that, "The underlying index tracks the performance of the 30 largest and most liquid companies in Sweden, Denmark, Norway, and Finland. The Adviser uses a passive or indexing approach to try to achieve the Fund’s investment objective."

In contrast, my NordiCaps Top 40 Rated ETF proposal is a semi-active fund with quarterly rebalancing among all companies in Sweden, Denmark, Norway, Iceland, and Finland with market caps over $1 billion U.S. Dollars. Currently, 116 companies qualify for the index with only the top 40 rated stock selected as equally-weighted, active constituents. Just 14 of the top 40 rated and three of the top 10 rated companies in my NordiCaps ETF proposal are also included in the FTSE 30 Nordic Index, offering investors exposure to a wider variety of companies beyond the 30 largest and most liquid in Scandinavia.

Both the top 40 rated and all 116 companies in my NordiCaps Region Index have fared better over the past year than the closest benchmark fund on the market, iShares Sweden ETF (EWD). Only the top 40 rated companies fared better than European benchmark ETFs such as iShares S&P Europe 350 (IEV), PowerShares Europe Small-Mid Caps (PWD), and Vanguard European Stock (VGK). Among the top 10 rated Nordic companies, only Novo Nordisk (NVO) and StatoilHydro (STO) have their stocks listed on U.S. exchanges while just six of the 116 companies maintain U.S. listings, which is another potential benefit of an ETF for Scandinavia by providing access to the region.