From Fort Knox to Financial Bungee Jumping: Where Your Index Stands

Every investor loves to say they’re “diversified,” but let’s be honest — sometimes that means you’re holding a Swiss index in one hand and Turkish equities in the other, hoping the laws of physics don’t apply to portfolios.

So, we took 28 major global stock indexes, classified them using official sovereign credit ratings* (because real data beats gut feelings), and then translated that into something human: how much coffee you’ll need to check your portfolio.

Group 1 – Fort Knox & Chamomile Tea (Ultra-Safe Market & AAA Credit)

Where portfolios go for quiet, predictable compounding.

• Switzerland (SLI) – More stable than your fridge temperature. (AAA Sovereign – Credit-Strong)

  
  

• Germany (DAX) – Engineered reliability, occasionally stalls like a luxury sedan with too much tech. (AAA Sovereign – Credit-Strong)

• Singapore (MSCI) – Even their volatility is punctual. (AAA Sovereign – Credit-Strong)

Group 2 – Sleepers With a Pulse (Low Volatility & AA-range Credit)

Mostly calm waters, with a wave or two to keep it interesting.

• South Korea (MSCI) – Currently meditative, but like any K-drama, expect plot twists. (AA – Credit-Strong)

  
  

• Canada (MSCI) – Oil, lumber, and polite returns. (AAA Sovereign – Underrated by Market Tier)

  
  

• Taiwan (MSCI) – Tech powerhouse; unfortunately, geopolitics doesn’t respect P/E ratios. (AA – Credit-Strong)

  
  

Group 3 – Respectable, Until They’re Not (Investment Grade Credit, Moderate Market Risk)

Like your reliable friend who sometimes disappears for a weekend.

• France (CAC 40) – Blue chips with a side of labor strikes. (AA– Sovereign – Credit-Strong)

  
  

• UK (FTSE 100) – Dividends, global exposure, and Brexit flashbacks. (AA – Credit-Strong)

  
  

• Japan (MSCI) – The quiet achiever with a demographic clock ticking. (A Sovereign – Credit-Strong)

  
  

• Italy (FTSE MIB) – Espresso-fueled volatility. (BBB Sovereign – Credit-Strong)

  
  

• Spain (Solactive) – Flamenco-style swings. (A Sovereign – Credit-Strong)

  
  

• USA (S&P 500) – The “default” choice… also defaults to drama in a crisis. (AA+ Sovereign – Credit-Strong)

  
  

• World (MSCI ACWI) – Diversification means you own all the problems. (Mixed Sovereigns)

  
  

• Australia (MSCI) – Commodities, housing, kangaroo hops. (AAA Sovereign – Underrated by Market Tier)

  
  

• Poland (MSCI) – Central European growth with occasional headaches. (A– Sovereign – Credit-Strong)

  
  

• Mexico (MSCI) – Nearshoring winner, peso mood swings included. (BBB Sovereign – Credit-Strong)

  
  

• Brazil (MSCI) – Carnival-level market parties. (BB Sovereign – Credit Risk Override)

  
  

• China (MSCI) – From growth rocket to “please don’t crash” mode. (A+ Sovereign – Credit-Strong)

  
  

• India (MSCI) – Growth machine with occasional overheating. (BBB– Sovereign – Credit-Strong)

  
  

• Greece (MSCI) – High returns but an Olympic-level workout for your nerves. (BBB– Sovereign – Credit Risk Override)

Group 4 – Thrill Seekers Anonymous (Speculative Market or Speculative Credit)

The financial equivalent of skydiving without checking your parachute twice.

• Turkey (MSCI) – Currency whiplash & political plot twists. (B Sovereign – Speculative)

  
  

• South Africa (MSCI) – Great yield if you can survive the FX rollercoaster. (BB– Sovereign – Speculative)

  
  

• Vietnam (FTSE) – Fast-growing, tracks are… uneven. (BB Sovereign – Speculative)

  
  

• Indonesia (MSCI) – Demographic goldmine with political potholes. (BBB– Sovereign – Credit Risk Override)

  
  

• Philippines (MSCI) – Potential reform always “next year.” (BBB+ Sovereign – Credit Risk Override)

  
  

• Thailand (MSCI) – Beaches, coups, and market swings. (BBB+ Sovereign – Credit Risk Override)

  
  

• Malaysia (MSCI) – The “safe” EM — if you squint. (A– Sovereign – Credit Risk Override)

  
  

• Saudi Arabia (MSCI) – Vision 2030 meets oil dependency. (A Sovereign – Credit Risk Override)

What This Means for Investors

• Credit-Strong + Market-Calm → Defensive core holdings.

  
  

• Credit Risk Override → Sovereign says “danger,” market says “maybe not.”

  
  

• Speculative → Only for the thrill-seeking allocation of your portfolio.

This isn’t just about volatility — it’s about knowing what kind of risk you’re holding.

• If you want steady compounding, stick with Fort Knox & Chamomile Tea.

  
  

• If you're looking for some movement without needing heart medication, Sleepers With a Pulse might be your speed.

  
  

• For those chasing higher returns with the occasional adrenaline hit, Respectable, Until They’re Not will keep life interesting.

  
  

• And if you believe investing should feel like extreme sports… well, Thrill Seekers Anonymous is hiring.

*Official rating source: https://tradingeconomics.com/country-list/rating

And as a final step, let's have a look at their results in the last years:

Table edited by Banking Advisory kft, baed on JustEtf data, at 5th of August 2025, calculated in euros, based on the largest Etf in the benchmark index.

The moral? Risk isn’t good or bad — it’s only dangerous if you don’t know you’re taking it. In other words: own your thrills, or they’ll own you.

remember...

1. Credit ratings ≠ market returns. AAA doesn’t mean outperformance; it means your money is safer from default risk. In equities, that safety can translate into lower volatility… but it also often means lower upside.

   
   

2. Credit rating is a sovereign lens, not a corporate one. The S&P 500 isn’t rated AA+ because Apple, Microsoft, and Amazon can’t pay their bills — it’s because the U.S. government was downgraded. Market fundamentals can diverge sharply from sovereign risk.

   
   

3. Some “Credit Risk Overrides” are goldmines — if timed right. Brazil, Greece, and Indonesia show that equity markets can massively outperform even when their governments wear a speculative badge. It’s about capital flows, reforms, and global risk appetite — not just the sovereign rating.

   
   

4. Correlation kills more portfolios than ratings. A well-constructed portfolio might include all four groups, but if all your holdings move together in a crisis, the classification doesn’t save you.

   
   

5. Geopolitical shock risk is the wild card. Taiwan’s AA rating looks solid… until a single headline changes the market’s perception overnight. The same applies to Saudi Arabia, South Korea, and even AAA-rated Germany if Eurozone stress flares up.

   
   

6. Long-term winners often graduate between groups. Emerging markets that improve credit ratings (think South Korea decades ago) can deliver both re-rating gains and equity growth — the real sweet spot for patient capital.

Disclaimer

The content of this article is intended for educational purposes only and does not constitute personalised financial advice. The strategies discussed are most effective when understood within the broader context of the investment principles covered in my advisory course. If you haven’t attended the course, I strongly recommend doing so before applying any of the ideas presented here.