Key Morningstar Metrics for Nordea Nordic Small Cap
- : BronzeMorningstar Medalist Rating
- : ★★★★★Morningstar Rating
- : Below AverageProcess Pillar
- : HighPeople Pillar
- : Above AverageParent Pillar
The managers behind Nordea’s Nordic small-cap strategy are topnotch, but the strategy’s large asset base poses liquidity risks and can make it harder to generate alpha from its highest convictions going forward. This results in a Process Pillar rating of Below Average while maintaining a High People Pillar rating.
Mats Andersson has built a strong track record here. From October 2002 through May 2025, the Finnish-domiciled fund has outperformed its Morningstar Category benchmark and category peers by a wide margin. Over his two-decade tenure at the fund, Andersson gained deep knowledge of the Nordic equity universe and a good sense of how to trade in the region’s often illiquid small-cap stocks. We also like that he is personally invested in the fund. Since October 2013, he has been supported by Björn Henriksson. He leads Nordea’s Swedish small-cap fund, which shares a lot of its holdings with this strategy. The duo typically invests in quality companies with strong management and appealing valuations. But they are confronted with the difficulty of maneuvering a large asset base: Assets totaled EUR 2.9 billion in June 2025, making it the largest in the Nordic small/mid-cap equity category. Including other strategies such as two Swedish small-cap funds, the managers are running close to EUR 5 billion. This led the portfolio’s tail to bloat, going up to more than 160 stocks with a weight of less than 0.5% out of around 220 overall.
It also resulted in an increase in the fund’s mid-cap holdings. That said, the portfolio remains very much small- and micro-cap-focused, which exacerbates liquidity concerns. The fund owns more than 10% of the outstanding shares in a number of core holdings. Although Andersson’s hands-on liquidity management style is comforting, the liquidity profile, the lifting of the soft closure of the larger Finnish-domiciled fund in May 2024, and the evolving shape of the portfolio warrant caution.
Nordea Nordic Small Cap: Performance Highlights
Under Mats Andersson, this fund has been comfortably beating its Nordic small/mid-cap equity category average, its Carnegie Small CSX Return Nordic benchmark, and the MSCI Nordic Countries Small Cap category index. This compelling long-term track record came on the back of strong security selection and has been achieved with less volatility and better downside protection than the average peer. The fund also outperformed its benchmark on a risk-adjusted basis (as measured by the Sharpe ratio) since October 2002.
Owing to its preference for quality and defensive stocks, the strategy has, at times, lagged its category benchmark in up markets, but it generally does better than the bogey in rocky markets. For instance, in the first quarter of 2020, the fund ranked in the 15th percentile of its category. Unsurprisingly, the fund’s more conservative stance held it back in the first half of 2021 when it felt serious pain from the underperformance of Sectra. But the managers’ patience paid off as the stock recovered later in the year, and the fund ended the year comfortably ahead of its category peers and index. In 2022, the fund lost 22.4%, but that was still much better than the 31.0% loss for the average category peer. In 2023, the fund has outperformed its peers, thanks to active positions in Clas Ohlson and Castellum and not holding Hexatronic. Negative stock selection in industrials was one of the main detractors in 2024, when the strategy lagged its comparators. Relative performance in the year-to-date 2025 through May was strong, with Clas Ohlson, Sectra, and Rejlers among the top picks.
