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For those investors who have noticed a strong return from an overseas market and wondered how that specific country could be played, your options are about to expand.

Barclays Global Investors

will introduce 11 new

MSCI iShares

, named after the

Morgan Stanley Capital International

indexes they track. The new products will augment the existing 17

World Equity Benchmark Shares

the company already sells. (The WEBS will also be taking on the new moniker.) The iShares are exchange-traded funds that look like an index fund but trade like stocks. (See

Dagen McDowell's

recent column on additional iShares.)

The opportunity to invest in some of the countries that will be offered may excite only the most dedicated international investor, although if you've been looking for a Portuguese fund, you'll have one. While the iShares will now make overseas investing a whole lot easier, it's still important to understand the conditions in the country you're targeting. But for the informed investor, iShares are like a cut-rate round-the-world investing ticket.


The new iShares offer more choice, more bargains and broader opportunity for investors," says Michael Porter of

Salomon Smith Barney


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The MSCI iShares are country-specific funds indexed to the MSCI index for that country and traded on the

American Stock Exchange

. Barclays introduced the first new one, a South Korea product, on May 12. Taiwan will follow on June 9, with South Africa and Brazil to come by the end of June. Greece, Indonesia, Thailand, Portugal, Turkey and Japan are on the schedule for the balance of the year. A regional product covering the

European Monetary Union

nations will also follow later this year.

MSCI iShares offer a number of advantages. Since they are passively managed index funds, they follow the general movements of the market. If a country's overall index is up, the iShare will be up a similar, though not exact, percentage. This is different from an actively managed, country-specific closed-end fund, which can invest outside of its benchmark and therefore stray -- either above or below -- the benchmark's performance.

However, there is occasionally a slight difference between the benchmark and the iShare price. For example, the price of the Mexico iShare

(EWW) - Get iShares MSCI Mexico ETF Report

is down 14.5% this year, while the MSCI Mexico index has fallen 15%. This is because the U.S. government occasionally prevents investors from buying stakes in major index components that are large enough to track the benchmark accurately.

Compare this, however, to a closed-end fund where the difference between the net asset value and the share price is typically much greater. For example, the share price of the

Mexico Fund

(MXF) - Get Mexico Fund Inc. (The) Report

is down 20% this year, while the NAV is down 16%. In general, WEBS performed better than closed-end funds over the last year, says Salomon Smith Barney's Porter.

MSCI iShares are also cheaper than closed-end funds, with average expense ratios of 0.84% compared with 1.9% for closed-end funds. And they can be shorted on downticks, while closed-end funds can not.

However, iShares could easily lose their advantage over closed-end funds, which trade at an average discount-to-NAV of 20% now. That means there are a lot of bargains out there. Historically, closed-end funds don't stay at such a high discount very long and savvy, risk-tolerant investors might start poking around.

Some people like the security of passive management, while others believe an investor who knows the local market can make a better bet. In a sense, however, iShares are managed by Morgan Stanley Capital International, which reviews weightings in indices every 18 months to 24 months. (MSCI announces reweightings quarterly and its last reshuffle was on Thursday.) However, rather than choosing one over the other, a savvy investor will play both, buying a closed-end fund when its discount gets too high, and vice versa. And in the countries that have only one or the other, then either one provides the same opportunity to play that country.

Of course, some investors don't like the idea of investing in individual countries at all, which they view as inherently risky without the benefit of diversification. "It's tough enough to predict the U.S. markets," says Harold Evensky, a financial planner based in Florida. When he wants to make an international bet, he looks for regional funds, not specific countries.

There's a lot to be said for that. But there is also a lot to be said for having the opportunity to go the single-country route when you have a strong hunch about a nation's prospects. Take Greece, for example. MSCI announced recently that it is considering upgrading Greece to developed from emerging economy status as part of its eventual joining of the European Monetary Union. That could make the Greece MSCI iShare very interesting when it appears.

David Kurapka's Global Portfolio column appears Wednesdays and Fridays on TSC. In keeping with TSC's editorial policy, he does not own shares in any companies or mutual funds mentioned in this column. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at