Indexes that international, country-specific exchange traded funds (ETFs) follow select their contents based on liquidity, the stocks’ performance and expenses. The question is which is a better investment: an actively-managed mutual fund or an ETF?

The pros for an international, country-specific ETF far outweigh the cons here. The actively-managed mutual funds are not as liquid, have more expenses and the most current data shows that most actively-managed funds have not outperformed their indexes. However, there are some cons to foreign, country-specific ETFs that J. Alex Tarquinio for the New York Times reports. One being that the foreign-focused ETFs do not hedge currencies. With the dollar at all time lows, investors will make money from owning foreign stocks but will loose money on exchange rates. And don’t forget about deducting foreign taxes. You are not exempt from paying taxes from whichever country you decide to invest in. In addition, volatility and risk are amped up with a single-country or narrow regional ETF.