Russell Investments will reclassify Greece as an emerging market country from a developed market economy — the first time the company has moved a developed country to an emerging market country within its indexes.
Following a three-year review, Russell determined Greece “did not meet macro- and operational risk criteria,” according to a news release.
The decision will become effective June 28. Greece, which accounts for about seven basis points within the Russell Global index, likely will make up about 44 basis points of the Russell Emerging Markets index following the reclassification.
“While reclassifications are rare, they do occur if a country no longer meets the criteria for its current classification,” according to Russell's release. “It takes three years of sustained changes in economic criteria for a country to be reclassified.”
Mat Lystra, senior research analyst with Russell Indexes, could not be reached by press time for further comment. Russell calculates about 700,000 benchmarks covering 98% of the investible market globally, with about $3.9 trillion in assets benchmarked to the indexes.