Exchange Traded Funds (ETFs) offer broad diversity in a single package, and if the ETF is an index fund then they carry added tax benefits when compared to actively manage mutual funds. When ETFs first hit the investment scene, they were simple index tracking funds. They mainly targeted passive investors.

Since then, the number ETF offerings has exploded. One part of the expanded ETF universe is the group of ETFs that hold stocks in foreign and emerging markets. This makes investing in the non-U.S. world of equities a snap.

While the more mature foreign markets performed very much like the U.S. stock market during the most recent bear market, investing in foreign stocks is still an excellent way to tap into the fastest growing countries, and hence the biggest gains.

Here’s a sample portfolio (from Kiplinger’s magazine) of ETFs that invest in foreign equities.

• 35% iShares MSCI EAFE Index (EFA)
• 15% SPDR S&P Intl Dividend (DWX)
• 15% WisdomTree Intl SmallCap Div (DLS)
• 10% iShares FTSE/Xinhua China 25 (FXI)
• 5% iShares MSCI Australia (EWA)
• 5% iShares MSCI Brazil Index (EWZ)
• 5% PowerShares Emerg Mkts Infrastr* (PXR)
• 5% WisdTree Dreyfus Emerg Currency* (CEW)
• 5% WisdomTree India Earnings (EPI)

*Less than one year old.

EFA

The iShares MSCI EAFE Index ETF tracks the MSCI EAFE index.
EXPENSE RATIO: 0.34%
YIELD: 2.71%

DWX

SPDR S&P Intl Dividend ETF tracks the S&P International Dividend Opportunities. index
EXPENSE RATIO: 0.48%
YIELD: 3.57%

DLS

The WisdomTree Intl SmallCap Div ETF tracks the WisdomTree International. SmallCap Dividend index
EXPENSE RATIO: 0.58%
YIELD: 6.45%

FXI

The iShares FTSE/Xinhua China 25 ETF tracks the FTSE/Xinhua China 25 index.
EXPENSE RATIO:0.74%
YIELD:1.31%

EWA

The iShares MSCI Australia ETF tracks the MSCI Australia index.
EXPENSE RATIO:0.52%
YIELD:4.14%

EWZ

The iShares MSCI Brazil Index ETF tracks the MSCI Brazil index.
EXPENSE RATIO:0.63%
YIELD:2.87%

PXR

The PowerShares Emerg Mkts Infrastr ETF tracks the S-Network Emerging Infrastructure Builders index.
EXPENSE RATIO:0.75%
YIELD:N/A

CEW

The WisdTree Dreyfus Emerg Currency ETF seeks to achieve total returns reflective of both money market rated in selected emerging market countries available to foreign investors and changes to the value of these currencies relative to the U.S. dollar.
EXPENSE RATIO:N/A
YIELD:N/A

EPI

The WisdomTree India Earnings ETF tracks the Wisdom Tree India Earnings index
EXPENSE RATIO:0.88%
YIELD:0.70%

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