Moving beyond the single country focus of exchange-traded funds (ETFs) such as the iShares MSCI Sweden Index (EWD), I have developed a NordiCaps Region Stock Index which includes 120 companies based in Denmark, Finland, Iceland, Norway, and Sweden with market caps over $1 billion US Dollars. I have also developed a ratings formula to choose 40 active companies on a quarterly basis for a semi-active ETF proposal, factoring in each company’s trailing 52-week stock price change, market cap weighting, and revenue weighting and then choosing the 40 active stocks based on the highest ratings for equally-weighted inclusion.

The Nordic region is expected to outperform the United States (US) and the EURO-zone (EU) economies with a forecast of real gross domestic product (GDP) growth of 2.3% on a market-cap weighted average basis for both 2008 and 2009. This real GDP growth compares favorably to predicted growth in the US (0.8%, 1.4%) and EU (1.6%, 1.9%) for 2008 and 2009. Norway and Finland are predicted to experience the strongest real GDP growth at an average of 2.7% through 2009 thanks to strong demand and high prices for exports such as shipping services and petroleum products.

Some top performers in the NordiCaps Region Index include agricultural chemical company Yara International (Oslo: YAR) (up over 100% in the last 52 weeks) and Vestas Wind Systems (Copenhagen: VWS) (VWDRY.PK) (up over 50% in last 52 weeks).