On March 26, 2025, the GlacierShares Nasdaq Iceland ETF was launched. The ETF tracks the MarketVector Iceland Global Index. The Index tracks both Icelandic companies (54.5% of the index) and companies in other Nordic nations that have a substantial footprint in Iceland (13% Luxembourg, 11% Norway, 7% Switzerland … followed by the US and the Faroe Islands, about equally weighted). Iceland’s economy is heavily dependent on just a handful of industries: energy production, tourism, fishing, and smelting aluminum. (Smelt and smelting?)
The market cap of Iceland’s two stock exchanges, the main exchange and the small/midcap exchange, comes to about €22 billion. That’s about the size of Darden Restaurants. There are 28 companies in the main market and five in the emerging market.
The expense ratio is 0.95%.
The Case for Iceland in your portfolio
(I can hardly believe I just typed that)
Data on the MarketVector index is scarce. The equivalent MSCI Iceland IMI index shows a pretty modest case for Iceland. Here are the five-year stats for MSCI’s Iceland index against a broad index of European stocks and MSCI’s ACWI – developed + developing market – index.
| APR | Standard deviation | Sharpe ratio | Max drawdown | |
| MSCI Iceland | 7.9 | 21.2 | 0.34 | 39% |
| EURO STOXX | 9.0 | 19.5 | 0.3 | n/a |
| MSCI ACWI | 12.4 | 17.3 | 0.62 | 34.5 |
The Icelandic market suffered catastrophic losses during the Global Financial Crisis, including a drawdown of nearly 75%, with a systemic banking collapse described as “the largest of any country in economic history.” Scandals, criminal prosecutions, and reforms followed.
Unquestionably, Iceland was not a great investment in the past. That’s not surprising: smaller emerging markets countries tend to get whipsawed in periods of global volatility, and the years since the GFC surely qualify. The argument for the fund is that the far north – Iceland, the Arctic, the Nordic states – will have a disproportionately greater role in the human future. There seem to be two sets of arguments:
- Iceland is a highly functional nation. The advisors highlight the fact that Iceland is #1 on the Green Future Index (measuring clean energy, innovation and policies), #3 on the UN’s Human Development Index, #1 on the World Economic Forum’s gender-equality rankings, #3 on the World Population Review’s Happiness Index, and #1 globally in terms of personal safety; it also derives 100% of its energy from renewable sources. Their public debt is low and falling.
- Iceland’s companies are positioned to thrive in an unstable, warming world. They’ve developed deep expertise in renewable energy sources such as geothermal and hydropower. They’re a global leader in creating sustainable fisheries, and there’s a robust demand for their products. Abundant clean energy and a skilled workforce make them an attractive locale for data centers and other tech investments.
Collectively, these stocks are potentially undervalued due to low analyst coverage, offering value opportunities. In addition, the ETF gives broader exposure to Nordic stocks. We’ve noted the argument for Nordic stocks in our Launch Alert for CrossingBridge Nordic High Income Bond. Over the past decade, Fidelity Nordic has returned 8.6% annually, 300 bps greater than Morningstar’s global equity index, which also speaks to the region’s potential.
What about the volcanoes?
Boy howdy, there are a bunch of them for good and ill. Those are a sort of mixed blessing. Increased activity threatens infrastructure, can disrupt agriculture and fisheries, and spooks potential investors (a bad thing in small, liquidity-sensitive markets). Some tourists are drawn by them, others repelled.
At the same time, increased activity without catastrophic eruptions might increase the geothermal energy potential of the island, increase Iceland’s attractiveness as a carbon-capture hub, and draw tourists. At its base, Iceland builds volcanism into the equation: its infrastructure and social planning start with the omnipresent reality and build from there.
Bottom line
Iceland offers exposure to renewable energy, sustainable industries, and post-COVID tourism recovery, appealing to ESG-focused and niche investors. However, small market size, liquidity constraints, and sector concentration require careful risk management. Investors should prioritize long-term horizons and diversification.
