Are the Nordics still worth investing in?

NORTHERN EUROPE

Greg Bennett, fund manager at Argonaut Capital Partners, explains why the recent slowdown in growth in the Nordic countries will not translate into a slowdown in company earning.

Since the European equity market bottomed in March 2009, the Nordic region’s markets of Norway, Sweden, Finland and Denmark, have consistently outperformed their European counterparts. The Nordic economies are not large – collectively about half the size of Germany – but they have grown strongly. Sweden and Norway are now 6% and 3% larger respectively than they were in 2007, respectively. However, while economic growth forecasts remain largely above the eurozone, the Nordic region’s incremental growth rates are now at the lower end (see table, below). These lower incremental growth...