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The accompanying table (click to enlarge) includes the Top 10 rated companies among a total of 82 which are included in the ETF Innovators (ETFI) Scandinavian Select Nordic Region Index. This index tracks the performance of companies in the Nordic Region with market caps over $1B U.S. dollars, with the Top 35 Rated companies chosen as active components for a new semi-active ETF idea with quarterly rebalancing.

Since I last wrote about the index in mid-October, the number of Scandinavian companies with market caps over $1B has declined by 10 and all 82 companies lost 42.6% over the past year on an equally-weighted basis. However, the Top 35 rated companies fared better, but still declined by about 25% in the last year. Also, with meltdown of the financial system in Iceland, no companies from that nation currently qualify for inclusion in this index, compared to five companies previously.

The closest benchmark ETF on the market is iShares Sweden (NYSEARCA:EWD), which is down by 49% in the past year while related European ETFs are also in the red in the past 52 weeks – including iShares S&P Europe 350 (NYSEARCA:IEV) (-44.7%) and Vanguard European Stock (NYSEARCA:VGK) (-44.1%). The OMX Nordic 40 Index is not currently tracked by an ETF, but is down 49.4% in the past year as a proxy of the 40 largest and most liquid companies in Scandinavia.

Among the top rated Nordic companies, I am most bullish on the prospects for Novo Nordisk (NYSE:NVO), which specializes in treatments for the rapidly growing epidemic of diabetes. Statistics posted at the CDC website estimate the total cost of diabetes for 2007 was $174 billion, along with evidence that at least 57 million people in the U.S. alone have pre-diabetes in addition to the 24 million people who already have diabetes – placing over 25% of our population at risk for complications of the disease and ensuring growing demand for diabetes care products.

Only six companies in the index have NYSE or Nasdaq listed ADRs, including NVO, StatOilHydro (NYSE:STO) – Energy, Torm (NASDAQ:TRMD) – Maritime Transport, Ericsson (NASDAQ:ERIC) + Nokia (NYSE:NOK) – Telecom & Wireless Communications, and Autoliv (NYSE:ALV) – Supplier of Auto Safety Systems. The top five companies by market cap in descending order include NOK, STO, NVO, Hennes & Mauritz--H&M Stores--(OTCPK:HNNMY), and ERIC.

Former high-flyers in the index which have now posted large declines in market value in the past year include Vestas Wind Systems (OTCPK:VWDRY) – Wind Energy, Yara International (OTCPK:YARIY) – Fertilizers, Norsk Hydro (OTCQX:NHYDY) – Aluminum, SeaDrill (OTC:SDRLF) – Offshore Drilling, and TRMD – Maritime Transport.

With many of the Nordic companies are highly leveraged to economic growth (i.e. energy, basic materials, transports, and financials), the region will be one to watch along with maritime transport companies, the Baltic Dry Index, and commodity prices for signs of a turnaround in the global economy and a return to growth.

Legend of Symbols Used in Table: ADR – for NYSE or Nasdaq listed companies, DC – Denmark (Copenhagen), FH – Finland (Helsinki), NO – Norway (Oslo), SS – Sweden (Stockholm)