Meanwhile, the iShares MSCI Mexico Capped ETF (NYSEArca: EWW) fell 6.8% so far this year. The SPDR MSCI Mexico Quality Mix ETF (NYSEArca: QMEX), which tracks a more customized basket of Mexico stocks that were selected based on metrics like value, quality and low volatility, dipped 5.0% year-to-date. Meanwhile, the db X-trackers MSCI Mexico Hedged Equity Fund (NYSEArca: DBMX) was down 0.3% so far this year. DBMX and the recently launched iShares Currency Hedged MSCI Mexico (NYSEArca: HEWW) both provide exposure to the Mexico’s market without the added currency risk of a depreciating peso currency. [iShares Unveils Massive Expansion to Currency Hedged Suite]

Mexico is at risk as its reserve coverage ratio, or foreign exchange reserves divided by its funding gap, is just 1.6 years, which is less than the seven years of Russia, another oil exporter. Additionally, Mexico is constrained by its near-zero real interest rate, leaving little room to cut rates if its economy weakens.

“Mexico, a country that many investors consider a safe haven, is now showing up as a high-risk emerging market,” Andres Garcia-Amaya, macro research analyst at JPMAM, told the FT.

JPMorgan also warned that Turkey and South Africa remain the highest risk nations, with Turkey now the most fragile of all due to its reliance on short-term funding. Year-to-date, the iShares MSCI South Africa ETF (NYSEArca: EZA) dropped 6.8% and iShares MSCI Turkey ETF (NYSEArca: TUR) decreased 21.3%.

For more information on the developing economies, visit our emerging markets category.

Max Chen contributed to this article.

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