NEW YORK (TheStreet) - Europe continues to be a volatile region of the globe as vulnerable members of the European Union struggle to combat against looming debt issues.Interestingly, despite the economic turmoil, there are still pockets of strength to be found in this corner of the globe. By cautiously approaching the region and picking the strongest players, it is possible for risk-tolerant ETF investors to find promise here. At the same time that the media has remained steadily focused on the troubling debt crises gripping nations such as Portugal and Spain, Germany has become a beacon of relative stability. In the near future, the nation will likely face turmoil along with the rest of the EU due to its proximity to troubled nations and connections to the euro. However, so far the German marketplace has proven to be particularly resilient in the face of adversity. For instance, last week investors learned that German business confidence for March declined slightly from February, marking the first drop after nine months of gains. The impact however, was limited due to the fact that the dip was less than analysts and economists had been predicting. Germany will likely continue to hold out as a region of stability in the near future and investors can tap into the nation using the iShares MSCI Germany Index Fund ( EWG). Designed to target the strongest and most recognizable names in the nation's broad marketplace, EWG exposes investors to basket of over 50 separate entities. The fund's top positions include Siemens ( SI), BASF ( BASF), Allianz ( AZSEY), Bayer ( BAYRY) and Daimler ( DDAIF). Together, the fund's top ten holdings account for close to two-thirds of its total portfolio. Unlike many international-focused ETFs, EWG's index is not solely reliant on a single sector. Rather, with 66% of the fund's index spread nearly equally across financials, consumer discretionary, industrials, and materials, EWG makes for a particularly well-diversified international ETF option. Outside of the EU, investors can find other European nations which may hold promise in the near future as well. Switzerland, for instance, has become a popular option among investors looking for defensive ways to play this part of the developed world.
Earlier this week, the Swiss economy received a vote of confidence from the International Monetary Fund. In comments made to the Swiss media, a representative explained that, "Switzerland is going in the right direction." Highlighting the nation's resilience and strong exports, the IMF is forecasting 2.4% growth in the current year. The iShares MSCI Switzerland Index Fund ( EWL) combines exposure to a diverse collection of the nation's largest and most recognizable names. EWL's index is headlined by companies hailing from defensive sectors such as healthcare and consumer staples. However, it is crucial to point out that the fund is particularly more top-heavy than EWG. Top holdings, Nestle , Novartis ( NVS) and Roche Holding (RHHBY) alone represent over 30% of its assets. EWL's ten largest positions represent nearly three quarters of its assets. This type of heavy focus may cause the fund to see more pronounced fluctuations from day to day. Heading into the foreseeable future, Europe will likely continue to be a tricky to navigate. EWG and EWL offer two ways investors can access stable corners of the region. However, in both cases, it is important not to get carried away. Rather than taking an all in bet on either of these funds, risk tolerant investors would be best off using them to complement an otherwise well-diversified portfolio. Written by Don Dion in Williamstown, Mass.