PRESCOTT, AZ ( TheStreet) -- In the last 10 years, do-it-yourself investors have become increasingly aware of the importance of foreign investing. The response from the ETF industry has been to create many types of funds that offer many types of exposure, including single-country funds.iShares dominates the single-country fund space in terms of both number of funds and assets under management. iShares initially bought its way into the segment by acquiring the old World Equity Benchmark Shares, or WEBS, product line from Morgan Stanley; the number of funds available since then has increased significantly. Constructing a portfolio that includes individual country funds requires two layers of analysis and research. The first layer is what might be expected in terms of a top-down study of the country's fiscal condition, economic stats, what it is that makes the economy of that country tick and any risk factors. A simple example is the WisdomTree Australia Dividend Fund ( AUSE). Australia has a debt-to-GDP ratio of 22%, which is well below the U.S. Its budget deficit was 4.1% last year. The unemployment rate just dropped to 5.2% and the published rate of inflation is a little over 1%. Obviously abundant natural resources is what makes the economy tick; more precisely, global demand for natural resources. The current risk factors would seem to focus on an over-extended housing market. The role that Australia could play in a diversified portfolio would be to offer exposure to a resource-based economy, which is likely to be at a different point in the economic cycle than a service-based economy like the U.S. This means Australian exposure offers a chance of better portfolio diversification vs. buying another service-based economy like one in Western Europe. This example is simple, as is the case with many countries. Investors would need to decide whether the attributes and prospects of a given country are compelling enough to include in the portfolio. This process would be undertaken with several countries, maybe more, to build a diversified portfolio. This can be preferable compared to using a broadly diversified fund like the iShares MSCI EAFE Index Fund ( EFA), because that fund has exposure to many unhealthy countries that should be avoided and will likely continue to struggle. These countries include Japan and most of the Eurozone.