Under The Hood: Feeling Finland (EFNL, NOK, AAPL)

For a while there, investors looking for ETF options for the Scandinavian countries were limited to the iShares MSCI Sweden Index Fund

, the Global X FTSE Nordic Region ETF

and the Global X Norway ETF

. That changed earlier this year when iShares, the world's largest ETF sponsor, rolled out a slew of new

that included new plays on Norway, Denmark and...Finland? Yeah, Finland. Having

of the iShares MSCI Denmark Capped Investable Market Index Fund

we thought it was time to look at the iShares MSCI Finland Capped Investable Market Index Fund

. The iShares MSCI Finland Capped Investable Market Index Fund is the first Finland-specific ETF and is home to 47 stocks and a 0.53% expense ratio. As is the case with so many country-specific funds on the market, there are good reasons to consider to EFNL and cautionary tales as well. It should be noted that Finland, like some of its Nordic neighbors, is fiscally sound. In his assessment of EFNL, Roger Nusbaum noted Finland's debt-to-GDP ratio in the range of 40% to 45%. That would certainly make the U.S., Italy and Greece green with envy. That's good news. However, Finland does use the euro, that's not good news. More good news: Finland has an AAA credit rating with Moody's Investors Service. From a recent Moody's report: Finland's rating is “appropriately positioned”. Finland is also named among the countries with the strongest fiscal position, whose ratings are not currently expected to come under pressure. The new Finland ETF's biggest problem may not be Europe's sovereign debt crisis at all. It may be an almost 17% allocation to mobile phone giant Nokia

. Yes, Nokia has rebounded nicely in 2012, but that's from a low base and the stock is still below $6 and the company is still struggling mightily in the smartphone war. Seventeen percent of an ETF devoted to one holding is really only good news when that stock is Apple

and 17% to one stock when there are just 43 in the ETF to begin can be a real crap shoot. It's good when that stock is performing well and very bad when it's not. Overall, industrials represent more than 28% of EFNL's weight. Technology names come in at almost 18% while materials and financials are over 15.5% and 12.5%, respectively. Giving EFNL some credit it should be noted that in the past month the ETF is up over 5%, easily outpacing the S&P 500 while looking far better than Nokia. The ETF has almost $2.8 million in AUM, but like many new ETFs, it also suffers from weak volume. On the bright side, the bid/ask spreads aren't terrible and that might be attributable to EFNL trading on the BATS Exchange. The bottom line with EFNL for now is it's a pretty good ETF that will be held hostage to Euro Zone news flow. It's that simple.