Why one Cornell professor wants you to get over the 'BRICs'

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") 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 acessibility restrictions
• Corporate opacity
• Limits to legal protections
• Political instability

The he built "radar" diagrams to show how different countries measured up, like these:

*Karolyi built the diagrams from 2013 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.

So some countries rank a lot better on certain indicators than others. Karolyi built the diagrams to give a more holistic view of countries' strenghts and weaknesses, but he also took the average of each country's score and laid them out next to one another.

That's where things get really interesting.

Six emerging markets actually ranked higher than some of the developed countries. On the other hand, six countries traditionally considered to be "developed" and safe are actually worse destinations for investment than some of the best emerging markets.

Check out the average scores:

According to this data, Taiwain, South Korea, Malaysia, Slovenia, South Africa, and Israel were less risky places to invest in 2013 than Portugal and Greece. Some where even better than Austria and France.

So, investment managers, it may be time to rethink those old distinctions. You could be missing out if you don't.