Financials are GREK’s second-largest country weight at 15.3%, which highlights the ETFs vulnerability to any shocks to Greece’s already fragile financial system. And issues remain regarding the formation of an entity to deal with Europe’s troubled banks.

“There are many details that still need to be figured out including which banks will be included and what European-level authority will handle the resolution of troubled banks. In addition, before integration can occur, the European Central Bank (ECB) needs to conduct a banking sector asset quality review program and a stress test, both scheduled for next year,” said iShares Global Chief Investment Strategist Russ Koesterich. [iShares: Two Unresolved Issues Challenging the Case for European Stocks]

Koesterich noted that next month, the IMF, European Union and European Central Bank will review Greece’s reform plans to see if the country is on track to receive the final loan installment from a previous bailout package.

An overlooked element to potentially higher volatility for GREK is that Greece is no longer a developed market. Since the start of this year, not one, but two index providers demoted the country to emerging markets from developed market status. Russell Investments did so in March with MSCI following suit in June.

Global X FTSE Greece 20 ETF

ETF Trends editorial team contributed to this post.