Latin America exchange traded funds have had a rough go of things this year and that much is confirmed by the performance of the iShares Latin American 40 ETF (NYSEArca: ILF), which has tumbled more than 25% year-to-date.

Amid a corruption scandal at Petrobras (NYSE: PBR), Brazil’s state-run oil company, high interest rates, a rising current account deficit and slack economic growth, Brazil stocks and ETFs have languished. 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.

According to JPMorgan Asset management, Colombia and Mexico are now members of the so-called fragile five group of emerging markets, edging out Brazil and India, reports Steven Johnson for the Financial Times.

The two Latin American countries, along with Turkey, South Africa and Indonesia, are seen as developing countries overdependent on volatile foreign investment flows. The original fragile five were among the worst off during the taper tantrum of 2013 when foreign investors pulled out of the emerging markets.

And there is more bad news for Brazil and Mexico due to the fact that financial services firms in those countries are seen as week.

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