Turkey was an emerging market investment darling in 2017. The country's benchmark stock index, the BIST 100 index, surged 48%, making it one of the best-performing stock markets in the world in that year. Turkish stocks were helped by the country's declining currency, the lira, according to Neil Shearing, chief emerging markets economist at London-based Capital Economics, as reported by CNN.

The problem is that Turkey's growing economy was fueled by foreign currency debt, which caused borrowing that resulted in deficits in the country's fiscal and current accounts. As of December 2019, Turkey's external currency debt accounted for roughly 57% of its gross domestic product (GDP). (See also: What Causes a Currency Crisis?)

After President Trump approved the doubling of metal tariffs on Turkey on Aug. 10, 2018, the lira plunged by as much as 20% after the news. The worry was that Turkey didn't have sufficient reserves to buy up its currency to halt further losses. A devalued lira makes it increasingly difficult for Turkey to service its foreign debt.

Many analysts believe Turkey's central bank could've averted the current crisis by lifting interest rates. "President Erdogan continues to prioritize growth and lower rates, which will extend the current crisis, rather than allow the economy to rebalance. He is here to stay, and markets don't have confidence in him. That's a dangerous mix," Richard Briggs, an analyst from CreditSights, told CNBC. (For more, see: Friday's Turkish Turmoil Explained.)

The following exchange-traded funds (ETFs) have high exposure to Turkey and have been mostly in free fall since the beginning of 2018. The current crisis may lead to capitulation selling that could result in a short-term buying opportunity. Investors should understand that this is a high-risk strategy. (For more, see also: Market Reversals and How to Spot Them.)

iShares MSCI Turkey ETF (NASDAQ: TUR)

Created in 2008, the iShares MSCI Turkey ETF attempts to match the performance of the MSCI Turkey Investable Market Index. The 50-stock portfolio achieves this by typically investing 99.5% of its assets in securities that make up the benchmark index as of October 2020. This includes small-, mid and large-capitalization Turkish stocks that trade on the Istanbul Stock Exchange. Nearly one quarter of the fund's portfolio (22.7%) consists of companies in Turkey's financial sector, which make the ETF highly sensitive to the country's troubled currency. TUR's top three holdings—Bim Berlesik Magalazar A (OTC: BIMAS), Turkiye Garanti Bankasi AS (OTC: TKGBY), and Akbank TAS (OTC: AKBTY)—carry a cumulative weighting of 22.1%.

The iShares MSCI Turkey ETF charges investors an annual management fee of 0.59% and has $329.50 million in net assets as of February 2021. At that time, the fund had five- and three-year annualized returns of -3.54% and -12.82%, respectively. Turkey's currency crisis accelerated selling in the ETF. In 2021 it had a -0.74% year-to-date (YTD) return. The ETF paid a 0.78% dividend in December 2020. (See also: Why the Collapse of the Turkish Lira Matters.)

First Trust Emerging Markets Small Cap AlphaDEX ETF (NASDAQ: FEMS)

The First Trust Emerging Markets Small Cap AlphaDEX ETF seeks to provide investors with similar returns to the NASDAQ AlphaDEX Emerging Markets Small Cap Index. The fund, formed in 2012, achieves this objective by investing the majority of its asset pool in stocks and/or American depository receipts (ADRs) that are in the underlying index. The tracked index uses quantitative methodologies to select small-cap stocks that may outperform traditional indices. Although nearly half of the fund's portfolio targets Taiwan, China, and Hong Kong, it still provides 11.63% exposure to Turkish stocks as of February 2021. The 202-stock portfolio holds steel producers, including Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS (IST: KRDMD), which was of particular interest given the steel tariffs that were imposed on Turkey by U.S. President Donald Trump.

The First Trust Emerging Markets Small Cap AlphaDEX ETF has assets under management (AUM) of $163.53 million as of February 2021. The fund's expense ratio of 0.8% is higher than the 0.59% category average. FEMS has returned 12.53% over the past five years and 2.73% over the past three years. YTD, the fund has returned 8.73% as of February 2021. (See also: Trump's Steel and Aluminum Tariffs: What You Need to Know.)

ALPS Emerging Sector Dividend Dogs ETF (NYSEARCA: EDOG)

Launched in 2014, the ALPS Emerging Sector Dividend Dogs ETF aims to track the performance of the Network Emerging Sector Dividend Dogs Index. The ETF holds mostly large-cap emerging market stocks that pay a high dividend yield. Investors gain exposure to Turkish stocks through the fund’s 7.69% allocation to the country as of October 2020. EDOG's portfolio holds geopolitical-sensitive stocks, including auto manufacturer Ford Otomotiv Sanayi AS (OTC: FOVSY) and steel company Eregli Demir ve Celik Fabrikalari TAS. 

The ALPS Emerging Sector Dividend Dogs ETF has $23.03 million in net assets and charges a 0.6% management fee. The 50-stock portfolio has a five-year annualized return of 7.73% and a three-year annualized return of 1.41%. As of February 2021, EDOG has returned 1.01% YTD. Investors also receive an annual 2.6% dividend. (See also: Evaluating Country Risk for International Investing.)