Greece ETF Soars on Economic Turnaround and Upgrade Hopes

The Global X MSCI Greece ETF (GREK) is the best-performing, nonleveraged, single-country ETF of 2025 so far, with a 62% year-to-date gain. That puts it seventh among all nonleveraged, U.S.-listed ETFs this year, trailing only a handful of defense and gold-miner funds.

Yet, despite the rally, investor interest has remained modest. GREK has taken in just $59 million in inflows in 2025 and manages $308 million in assets, a relatively small footprint given the fund's eye-popping performance.

GREK: Reclassification Catalyst

One major catalyst fueling the rally is the potential reclassification of Greece from "emerging market" to "developed market" status by major index providers. Both FTSE Russell and S&P Dow Jones Indices are reviewing the country’s status and could announce decisions later this year or in 2026.

Such a shift would likely trigger forced buying by index-tracking, developed-market funds, potentially unlocking fresh inflows into Greek equities.

In a report last month, S&P Dow Jones Indices outlined the rationale for a potential upgrade, noting that Greece has come a long way since the depths of the eurozone debt crisis.

“The Greek market was significantly impacted by the political and economic turmoil of the European sovereign debt crisis that began 15 years ago. However, Greece has since achieved consistent economic growth due to the efforts of policymakers working with the EU, ECB, and IMF to effectively restructure the economy. The improved business climate has led to a resurgence in exports and foreign direct investment, while inflation and unemployment are now at or below long-term levels.”

The firm added that Greece’s banking system has strengthened and public debt, while still high, has improved relative to GDP.

Moody's Upgrade

Those comments followed a credit-rating upgrade by Moody’s in March, which lifted Greece to investment grade (Baa3). The firm cited stronger-than-expected fiscal performance, institutional reforms and continued political stability as reasons for the upgrade.

“We expect Greece to continue to run substantial primary surpluses, which will steadily decrease its high debt burden. Moreover, the health of the banking sector continues to improve, which limits the risk of a banking sector–related credit event.”

According to Reuters, Greece’s debt-to-GDP ratio has declined by 40 percentage points since 2020, falling to 154%—still the highest in Europe but a significant improvement nonetheless.

From a valuation standpoint, Greek stocks also appear attractive. The MSCI Greece Index trades at 9.3 times forward earnings, compared to 14.6 times for the MSCI Europe Index, despite faster projected growth.

Of course, risks remain. Greece still carries the highest debt burden in the eurozone, and there’s no guarantee that an index upgrade will translate into large inflows. But, for now, investors seem willing to bet that the country’s rebound story still has room to run.