Key Takeaways
- Novo Nordisk was the biggest stock in Europe until June 2025.
- Two European funds have a 9%+ exposure to the Wegovy and Ozempic maker.
- Fundsmith’s Terry Smith criticizes Novo performance.
Shares in Danish pharmaceuticals stock Novo Nordisk NOVO B have fallen more than 60% since August 2024, leaving funds that invest in what was once Europe’s most valuable stock looking exposed.
Novo Nordisk’s fall from grace follows its latest profit warning on July 29, when the maker of weight-loss drugs Ozempic and Wegovy shed 23% in value after it revealed a struggle against US rival Eli Lilly and copycat obesity drugs.
To see which European funds are most exposed to Novo Nordisk’s decline, we analyzed funds with a Morningstar Medalist Rating which hold the stock.
Out of 384 funds, the list highlights the top 20 holders of the drugmaker, from the highest to lowest portfolio weighting, based on the most available portfolio disclosure date. We then compared the weighting of Novo stock with their Morningstar Category peers.
Only two funds hold Novo Nordisk at a weighting above 9%: as of March 31, BLS Invest Danske Aktier KL and BLS Invest Danske Aktier AKK allocated 9.89% and 9.81% of their portfolios to the Ozempic and Wegovy manufacturer.
Both funds, domiciled in Denmark, hold Bronze Medalist Ratings.
According to Morningstar’s manager research team, the funds have exposure to low volatility stocks and invest in companies that are “consistently profitable, growing, [and with] solid balance sheets.”
Despite these funds’ large allocations to the drugmaker, they are only slightly overweight relative to the Denmark equity universe.
Within Morningstar’s EAA Fund Denmark Equity Category, Novo’s average weighting is 7.32%. That leaves BLS Invest Danske Aktier KL overweight by 2.57% and BLS Invest Danske Aktier AKK by 2.48%.
Some of the funds had smaller weightings to the Danish pharmaceuticals giant, yet they were overweight the stock compared with their Morningstar category peers.
Norway-domiciled ODIN Bærekraft led the way. The fund, which has a Silver Medalist Rating, held Novo at 6.67% of its portfolio as of May 31. The fund was 4.99% overweight relative to the EAA Fund EUR Flexible Allocation—Global Category, where the average weighting of the stock is only 1.69%.
Fundsmith Blames Novo Slide for Underperformance
UK star fund manager Terry Smith’s flagship Fundsmith Equity I Acc and its Luxembourg-domiciled European equivalent, Fundsmith Equity I EUR Acc, also held Novo at 5.44% as of March 31.
The funds were 3.64% overweight Novo in comparison to their respective categories, with both having an average allocation of 1.81% in the Danish company.
In his 2025 midyear letter, Smith blamed flagging performance on Novo Nordisk’s decline and a weaker dollar.
“Novo Nordisk alone accounted for almost all the underperformance during the period. Its ability to snatch defeat from the jaws of victory in respect of its leadership in weight loss drugs continues to be remarkable. Its inability to deal with the US legal and regulatory system’s approach to its success would be interesting to observe from a safe distance,” he said.
Morningstar analyst Daniel Haydon still backs Fundsmith’s investment philosophy “which is to buy and hold high-quality businesses that will continually compound in value.”
Haydon says: “The investment process is simple and well-articulated at all levels, starting with their stated objective, their strong identification of areas in which the fund won’t invest, as well as total clarity in what they seek in investments and the price they are willing to pay. This leads to a high-conviction portfolio of 20-30 high-quality companies.”
Haydon also highlights the impact of the poor performance of the fund’s consumer holdings in 2024, but he feels investors should focus on the long-term returns of the fund to fully benefit from the strengths of the manager’s approach.
Other Novo Nordisk Overweight and Underweight Funds
Another fund with a significant overweight to Novo Nordisk is the Wellington European Stewards Fund.
The fund, which has a Gold Medalist Rating, held Novo stock at 5.66% as of June 30 and was 3.22% overweight Novo in comparison to the EAA Fund EUR aggressive-allocation category, which has an average of 2.4%.
“The managers have consistently had exposure to low-volatility stocks over the past few years, or those whose relative returns look best when the markets are at their worst,” according to Morningstar’s manager research team.
“These low-risk stocks are typically at their best when markets are not. Low volatility exposure contributes to limited loss on the downside at the cost of a lag in bull markets,” the research analysts say.
However, one fund was significantly underweight Novo Nordisk stock and that was the Fundamental Invest Stock Pick II Akk. This fund, which has a Bronze Rating, held Novo at 3.61% of the fund as of March 31. Yet it was underweight Novo by 3.71% compared with its respective category, the EAA Fund Denmark Equity category, which holds the stock at 7.32%.
Morningstar analysts praise the fund’s approach to holding smaller, higher-growth companies, a strategy that tends to be successful when markets are strong.
