TheStreet.com Ratings: Four Excellent Euro ETFs

Exchange-traded funds with an international outlook have enjoyed better returns than their U.S.-focused counterparts for several years now, a trend that TheStreet.com Ratings staff has been monitoring since June 2003.

For the period ended Sept. 30, our models indicate that from the universe of more than 800 closed-end funds that we rate -- which includes some 195 exchange-traded funds -- the top four performers are focused squarely on Europe.

Those four ETFs, in order of their ranking, are the iShares MSCI Austria Index Fund (EWO Quote), the iShares Belgium Index Fund (EWK Quote), the iShares MSCI Spain Index Fund (EWP Quote) and the iShares MSCI Sweden Index Fund(EWD Quote).

In addition to their European focus, these ETFs all carry a heavy weighting toward the banking sector in their particular regions.

Globally, the banking sector is performing well, and many of TheStreet.com Ratings' top-rated funds have substantial holdings in the area.

Investors who want to diversify into the European region may look at taking a position in each of these country funds. More risk-tolerant investors might want to limit their holdings to the Spain and Sweden funds, thereby investing in the two fastest-growing economies.

An alternative approach would be exposure to the Swedish fund only. ...