If you want to own Asia, your tolerance for volatility will tell you whether to stick with a regional fund or not. If you can take on single-country volatility, part of the process has to be deciding what country you want to own and the best way to capture that country -- a stock or investment product.
If you care about diversification, you are probably going to have more foreign exposure than just Asia, like maybe Europe or Australia. The best chance of success is exposure to many different countries that rely, economically, on different things, such as exports or internal growth. Blending different countries (or for some folks, regions) that react differently to certain events creates a zigzag effect that can reduce volatility in times of turmoil.
For example, the crash in Thailand last week would have a better chance of affecting Malaysia than it would Belgium.
I mention Belgium because the
Globe and Mail
article specifically picks on the
iShares MSCI Belgium Index Fund
because 50% of the fund is in the top three holdings. While three stocks comprising 50% of a fund is far from ideal, there are not too many ways to narrowly invest in Belgium for people who want to. ADR.com only lists four Belgian ADRs, and I was not able to find a traditional mutual fund that only invests in Belgium. For now, flawed as it may be, EWK could be the best way to own Belgium, but the
Globe and Mail
article never addresses that possibility.
Despite the impression given by the article, there are a number of better-diversified single-country ETFs out there. I would suggest doing some research on
to see whether they are diversified enough to fill some holes in your investment portfolio.
There is no shortage of content to tell you not to invest in something, but I don't think people can learn from it. Do you really need someone to tell you a foreign stock is riskier than a country fund, which is itself riskier than a regional fund, which is riskier than
iShares MSCI EAFE
? I don't think so. These all carry varying degrees of risk and require varying degrees of monitoring, but risk by itself is not much of a determinant of utility.