The iShares MSCI Turkey ETF (NYSEArca: TUR) is down nearly 29% over the past six months, making it one of the worst-performing single-country emerging markets exchange traded funds over that span. Unfortunately, the potential exists for more headwinds for the lone Turkey ETF.

In July, Turkish stocks and TUR tumbled following a failed coup. Turkish markets plummeted on concerns of the implications of the ensuing political turbulence after a failed coup d’etat attempt from the military branch.

In August, Turkey’s central bank lowered interest rates by 25 basis points to 8.75% and said it stands ready to provide liquidity to the country’s banks, if needed, an important factor considering TUR’s weight to financial services stocks is almost 44%, or more than triple the ETF’s second-largest sector allocation.

Following the July coup attempt, S&P Global Ratings cut the country’s sovereign debt rating to BB/B on concerns over an increase in political risk after the failed putsch, reports Bloomberg. Moody’s Investors Service also put a number of companies on review for a downgrade and is reviewing the sovereign for a possible downgrade.

Another ratings agency, Fitch Ratings, could soon downgrade Turkey’s sovereign credit rating.

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