Denmark’s stock market is having a stellar year so far.
The stock indexes for the tiny northern European nation are easily beating out the S&P 500, which is up slightly for the year, and Japan’s Nikkei 225 and the Stoxx Europe 600 index, which are both in negative territory.
The Danish indexes, such as the OMX Copenhagen 25, are up more than 14 percent in 2020, or more than 20 percent if you calculate its return in dollar terms. That’s within spitting distance of other market bright spots, like the tech-heavy Nasdaq Composite, which has climbed more than 23 percent on the strength of lockdown-friendly companies like Amazon and Apple.
What accounts for such a stellar performance? Experts say it’s a combination of several factors:
an effective response to the coronavirus crisis (assisted by the country’s robust social safety net)
a collection of companies well positioned to weather the crisis
a knack for well-balanced management
The main contributor to the Danish stocks’ performance is a matter of what the companies do rather than where they do it: Roughly 50 percent of the market capitalization of Danish stocks is in almost recession-proof health care and pharmaceutical companies — a solid portfolio in the midst of a global pandemic.
“The mix of the Danish market is completely different than you see in the global market, and there you have, sort of, the explanation for why has the Danish market performed so much better,” said Carsten Jantzen Leth, head of Danish Equities at Nordea Asset Management.