Rolle im Portfolio
DnB OBX would be most suitable as a tactical tool for investors looking to place a bet on Norwegian large cap equities, and more specifically on the country’s heavily-weighted energy sector. About 43%-47% of the fund is allocated to energy and materials stocks, with a special focus on Statoil, the world’s biggest offshore oil and gas producer, which has a 18-22% weighting. Those looking to invest in this fund should have a positive view on the prospects of the commodity space, and energy prices in particular. Another 27-30% of the fund is comprised of telecommunications company Telenor and banking group DnB NOR. This top heavy stock composition makes DnB OBX one of the most concentrated single country ETFs in Europe, with all the idiosyncratic risks it entails.
This Norwegian krone-denominated fund can also serve as a diversifier within a European equity allocation by providing unique currency exposure. However, non-Norwegian investors looking at the krone as a safe haven because of the country’s strong fiscal position and positive account surplus should temper their view. Being highly correlated with energy prices, the krone is first and foremost a commodity currency with the same sensitivity to global growth that characterises all commodity currencies.
Fundamentale Analyse
Norway, Scandinavia's richest nation, proved particularly resilient during the worst of the financial crisis, experiencing a relatively shallow recession. The dynamism of household consumption and the direct effect of public expenditure growth were major factors in sustaining demand, while the bounce back in oil prices also supported investment in the petroleum sector. This was reflected in the remarkable rebound of the Norwegian stock market in 2009-10. It then gyrated in “risk on/risk off” mode with the Eurozone sovereign debt crisis but resumed its rally thereafter, against a backdrop of low interest rates, extremely loose global monetary policies and an improving outlook for the global economy.
Nonetheless, 2014 was a challenging year for the Norwegian stock market, with the dramatic collapse in oil prices --from above $90 to below $45 a barrel. It has been particularly tough for energy companies, which have been forced to cut investments.
With weak oil investment, growth prospects for the domestic economy have weakened, prompting Norway's central bank to cut its key interest rates in December 2014 to 1.25% --a level only once reached briefly in 2009 after the financial crisis. In March 2015, Norges Bank unexpectedly left interest rates unchanged but signaled that it is prepared for more pronounced measures against a backdrop of extreme easing from other European central banks. The European Central Bank (ECB) has embarked on a massive quantitative easing (QE) programme, while neighboring policy makers in Sweden and Denmark have cut rates deep below zero. In this context, the Norwegian krone remains relatively strong against other European currencies, although not against the US dollar.
Looking ahead, the future remains challenging for oil-exporting economies like Norway, as big oil-importing nations are systematically working to reduce their oil dependency and demand. Even China is trying to control the pace at which the demand for oil imports grows.
In the meantime, a key risk facing companies making up the OBX remains the economic situation in Europe--home to their biggest trading partners. The latest figures suggest that Euro Area GDP grew by a meagre 0.9% in 2014. But the pace of recovery is expected to accelerate this year, helped by lower energy prices, a weaker euro, and the ECB's QE programme.
Indexkonstruktion
The OBX index is a total return index composed of the 25 most traded shares on the Oslo Stock Exchange. The constituents are selected on the basis of a six month turnover rating. It is a semi-annually revised free float adjusted total return index (dividend adjusted) with composition changes and cappings implemented on the third Friday in December and June. The energy sector is the biggest sector represented, comprising 29-33% of the index's value, followed by financial services (16-20%), basic materials (13-16%) and communication services (12-15%). The index’s largest constituent is Statoil--which represents 18-22% of its value--followed by banking group DnB and telecommunications company Telenor, with a 13-15% weighting each.
Fondskonstruktion
DnB OBX is a UCITS fund that tracks the OBX index through full replication. The fund holds all the securities within the index, in the same weightings as stipulated by the index. The fund doesn’t engage in securities lending.
Gebühren
The fund levies a total expense ratio (TER) of 0.30%, which is on par with other ETFs tracking Nordic single country equity benchmarks. Additional holding costs borne by ETF investors but not included in the TER include transaction and rebalancing costs. On top of holding costs, ETF investors will typically be charged trading costs, including bid-offer spreads and brokerage commissions, when buy and sell orders are placed for ETF shares.
Alternativen
XACT offers an alternative to this fund with an identical TER of 0.30%. XACT OBX however is smaller as measured by AuM. It is also less actively-traded on the Oslo Stock Exchange as measured by the 3-month average daily trading volume.
Those who are bullish on the Nordic energy sector could consider the XACT Nordic Energy ETF which is composed of the largest energy stocks listed in Oslo, Stockholm, Helsinki and Copenhagen. Norwegian stocks represent about half of the fund's weighting.
Another alternative consists in taking a direct, diversified, long position in ETFs that track the Europe STOXX 600 Oil & Gas index. They hold the largest oil and gas companies in Europe with the UK accounting for about 40% of the funds’ weighting, while Norway accounts for only 7-8%. Among the seven ETF issuers that track the Europe STOXX 600 Oil & Gas index, Lyxor, iShares, Source and db x-trackers offer the most liquid options on Euronext Paris and Xetra, as measured by the 3-month average daily trading volume. These funds charge TERs ranging from 0.30% to 0.52%.
