France has many world-class companies that may make it the host of an undervalued and potentially attractive country exchange traded fund (ETF).

• High Foreign Sales. France’s ETF, iShares MSCI France Index (EWQ) currently down 4.9% in the last week; down 8.4% in the last month, includes many world-class firms which provide foreign sales that account for 58% of the overall sales, writes Michael Krause for ETF Guide. The high percentage of French-firm foreign sales is also a good indicator for the global economy and its eventual recovery.

• Diversity. The fund is also well diversified with no large concentrations in one or two sectors.

• Insulation. The diversification and sector balance has kept French firms from rapid deterioration experienced elsewhere. Their firms may have a smaller decline in earnings in the downturn since they have smaller debts which would help them drudge through the credit debacle.

EWQ is far below its trend line right now, however. But given these factors working in its favor, it might be worth keeping an eye on for future possibilities.

Tags: Europe, EWQ, France, Global ETFs