What Country is Next to Depart the AAA Club?

The members of the AAA credit rating club are dwindling, and on Thursday Egan-Jones lowered France - the Eurozone's second-largest economy - from A- to BBB+. Although France retains an AA+ rating with Standard & Poors and AAA status with both Moody's Investors Service and Fitch Ratings, the country is clearly vulnerable to further downgrades as Europe's sovereign debt crisis worsens. In other notable downgrades,

that Austria would lose its AAA rating, and in mid-January S&P made the move by lowering Austria to AA+. In the past 90 days, the iShares MSCI Austria Investable Market Index Fund

has plunged 13%. Standard & Poor's stripped the U.S. of the highest possible rating last August. The problem for international bond and equity investors looking for the AAA label is that more countries are at risk. Here's a look at some of the ETFs that track countries that are clinging to AAA ratings.

S&P affirmed the Netherlands' AAA credit rating earlier this year, but Moody's took the knife to its ratings of major Dutch banks on Thursday. The ratings agency lowered the long-term ratings of ING, Rabobank, ABN, LeasePlan and KBC by two levels and SNS by one notch. This is important because ING is EWN's second-largest holding and bank stocks account for over 16% of the fund's weight. The AAA rating currently belonging to the Netherlands is tenuous because the economy is flirting with a recession and the country will not be able to balance its budget by 2017 unless it makes spending cuts or raises taxes

.

China's slowing economy and subsequent lower demand for commodities have thorns in the side of the Australian economy. It is those situations that in part explain why the iShares MSCI Australia Index Fund is off 9% in the past month, but the good news is that Australia's AAA rating appears safe. Earlier this week, Moody's said the outlook for Australia's AAA ratings is stable, citing the country's

.

Singapore is 9,631 miles away from Madrid, but the city-state is further removed than it in terms of fiscal health. EWS has been sturdy with a year-to-date gain of 11.3% and Singapore's ratings are

. The Monetary Authority of Singapore this week raised its 2012 GDP growth forecast to 3% from 2.5%. In that vein, also consider the iShares MSCI Signapore Small Cap Fund

.

Hong Kong landed the AAA rating from S&P in December 2010 and that rating was affirmed with a stable outlook in November 2011. EWH has been a solid performer: the fund is down just half a percent in the past month and up 5.8% year-to-date. Despite the obvious - intimate ties to China that can adversely impact Hong Kong-listed equities - this AAA rating is not in danger. It may also bode well to consider the newly minted iShares MSCI Hong Kong Small Cap Index Fund

.

Of the four countries highlighted here, the Netherlands stands the greatest chance of losing its AAA rating - implying EWN is the riskiest of the ETFs mentioned in this piece. For more on ETFs with exposure to AAA-rated countries, click

.