Earlier this week, I wrote that Greece had been downgraded by MSCI from “developed economy” to “emerging market.” In this video, I dig into the details and explain what this means for investors.
The point to take away is that your emerging market ETF or mutual fund may not be invested in the countries you expect. It may be loaded down with already mature countries such as Taiwan or South Korea…or with basket cases like Greece.
Before you buy an emerging market ETF or fund, go to a financial website such as Yahoo Finance or visit the fund’s website to take a look under the hood. Nearly all ETFs and mutual funds provide easy viewing access to their holdings.
See also: Greece Downgraded to “Emerging Market.” But Will It Ever Emerge?
