Record oil and gas revenues could push Norwegian ETF higher

2021 has been a strong year for the energy sector as global economies recover, and Norway couldn’t be happier as it delivered record numbers last year.

Demand for oil and gas has skyrocketed, bolstering Norway. The sector powers 50% of the country’s economy, so strength in the energy sector (particularly oil and gas) translates into prosperity.

“Despite the climate crisis, Norway’s love affair with oil appears to continue. Never before has the country enjoyed such high revenues from its oil and gas industry,” reads a Life in Norway article. “The Norwegian Petroleum Directorate has declared 2021 to be a ‘great year’ for oil and gas in Norway. Oil and gas production has remained high as demand and prices have increased.”

“In the last quarter of 2021, Norway’s oil and gas exports reached more than NOK 100 billion ($11.5 billion) per month. This is almost three times more than in the same period l ‘previous year,’ the article adds.

Of course, Norway understands that oil and gas revenue forecasts for the future will be affected by a move towards green energy. As such, the country is also looking to bolster its renewable energy sources with investment dollars.

“Norway is investing heavily in green technology projects, particularly in offshore wind energy and carbon capture and storage technology,” the article adds.

Exposure to Norway in an ETF

An easy way to gain exposure to Norwegian stocks is to use an index traded fund (ETF). One to consider is the Global X MSCI Norway ETF (NORW).

In accordance with the fund description, NORW seeks investment results which generally correspond to the price and yield performance, before fees and expenses, of the MSCI Norway IMI 25/50 Index. The fund invests at least 80% of its total assets in the securities of the underlying index and in American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) based on the securities of the underlying index. The underlying index is designed to represent the performance of the broad universe of Norwegian equities.

NORW offers investors:

  • Efficient access: The ETF represents a large basket of Norwegian securities.
  • Targeted exposure: The fund targets exposure to a single country, but also has a diversified exposure in terms of industry sectors, with financials, energy and consumer staples being the top three.
  • Semi-annual distributions: NORW has a fixed income component which is paid semi-annually (yielding 1.84% as of January 27, 2022).
  • Strong 12-month performance: NORW is up 12% since January.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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