Andrew Karolyi, a finance professor at Cornell University and an expert in investment management, wants to get over the idea of the BRICS. He says that isolating countries into rich/poor categories with cute acronyms is unhealthy – not only for those countries, but also for investors who might overlook great opportunities based on a name. In his first book, "Cracking the Emerging Markets Enigma," Karolyi developed a framework to measure the risks of investing in countries around the world. It's intended to help investment industry folk better understand what emerging markets are ("underfunded growth opportunities with problems," he says) and how they stack up next to one another. What he found is that the line between "good" and "bad" destinations for investment is beginning to blur. Karolyi ranked 33 countries traditionally considered "emerging markets" against 24 "developed" countries, based on these six indicators: Market capacity constraints Operational inefficiencies Foreign accessibility restrictions Corporate opacity Limits to legal protections Political instability The he built radar diagrams to show how different countries measured up. Some ranked a lot better on certain indicators than others. Here are a few examples: *Karolyi built the diagrams from data on investment flows, not returns, because of the infrequency of data on returns in many countries. You can see diagrams for the nearly 60 countries he measured here. The idea behind the diagrams was to give a more holistic view of countries' strengths and weaknesses, but he also took the average of each country's scores and laid them out next to one another. That's where things get really interesting. A handful of emerging markets actually ranked higher than some of the developed countries. Meanwhile, six "developed" countries, traditionally considered to be safe, are actually riskier destinations for investment than some of the best emerging markets. Check out the average scores: According to this data, Taiwan, South Korea, Slovenia, Malaysia, South Africa, and Israel were less risky places to invest in 2012 than Portugal. Some were even better than Austria and France. And look at Greece – fully 16 emerging markets ranked higher. So, investment managers, it may be time to rethink those old distinctions. You could be missing out if you don't.Join the conversation about this story » NOW WATCH: 6 shortcuts in Excel that will save you a ton of time
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