European economies get a lot of undeserved bad press. Take the European Union for instance. A few of its economies are indeed lagging like Portugal and Greece, but at the same time several are excelling like the United Kingdom and Germany. The same may be said for the core Eurozone economy. Then there are the Central and Eastern European (CEE) states, several of whom have made remarkable strides within the EU. With a moment’s reflection, an economic comparison can be made with the United States. Some states, like New York, California and Maryland are economic powerhouses, whereas Mississippi, Louisiana and Illinois are still struggling with tough economic times. The same is true of the wider region of North American economies like Canada and Mexico. Some states or provinces do well with natural resources or foreign investment while other must rely on seasonal tourism or agriculture. It takes governments with foresight and courage to forge ahead to establish economic zones while being as inclusive as possible. It is, in fact, the basic purpose of an economic zone: to eliminate economic border constraints and provider opportunity for the weaker entities through unencumbered economic interaction with the stronger entities.
Scandinavia probably isn’t the first place that springs to mind for most people looking for investment opportunities in Europe. But some analysts say exchange-traded funds that invest in the region are worth considering now as a way to bet on a recovery in European economic growth.
One argument in favor of including Nordic funds in a portfolio: The region’s biggest economies—Sweden, Denmark and Norway—all have their own currencies, even though Sweden and Denmark are members of the European Union. That sets them apart from countries in the eurozone because the Nordic economies don’t depend on the European Central Bank to help stimulate their economies, says Todd Rosenbluth, a senior director at S&P Capital IQ.