Domestic and international stocks and exchange traded funds (ETFs) have started to shine since hitting a low on March 9, but how do you know which ones to choose?

With well over 700 ETFs being offered ranging from going short on gold to gaining exposure to Malaysia, some investors are overwhelmed by the smorgasbord of choices.  When it comes to narrowing it down to international ETFs, the list still remains long.  According to Simon Maierhofer of ETF Guide, there are 13 broad international equity ETFs, 26 regional ETFs, 42 country-specific equity ETFs, 32 international equity sector ETFs and 16 size-specific international equity ETFs.  This could confuse anyone.

When picking an international ETF one thing to keep in mind is diversification.  Emerging markets are known to be more volatile than the markets of developed nations, therefore one doesn’t want to be overly exposed to a specific region or country, unless, of course, that is your strategy.

When focusing on broad international equity ETFs, the vast majority play favorites to Japan and the United Kingdom.  Case in point: the popular iShares MSCI EAFE Index ETF (EFA), which is down nearly 6.6% for the year, allocates 24.1% of its assets to Japan, 19.9% to the United Kingdom and holds 838 securities; 44% of its assets are allocated to two countries, talk about a lack of diversification.

On the flip side, the Vanguard FTSE All World-Ex US ETF (VEU), down for the year and allocates 17.5% of its assets to Japan, 14.4% to the United Kingdom and holds a whopping 2,167 securities – a much more diverse option.  Exposure to Japan and the United Kingdom isn’t necessarily a bad thing; after all, they are both developed nations. Research indicates, however, that they move in tandem with the U.S. equity markets.

When it comes to regional ETFs, it is generally a good idea to steer clear from both Japan and the United Kingdom if looking long term.  An ETF to take a look at here is the iShares MSCI All Country Asia Ex-Japan ETF (AAXJ), which tracks many of the emerging markets in Asia without any exposure to Japan.  EPP is up 15.9% for the year and has crossed both of its 50- and 200-day moving averages.

In regard to country-specific ETFs, making a choice is up to the individual investor and the exposure he wants.  As of now, China is a hot market because of talks that the nation may be able to pull itself out of a downturn by the middle of the year.  An ETF to watch here is the iShares FTSE/Xinhua China 25 Index Fund (FXI), which is up 9.9% for the year, has crossed its 50- and 200-day moving averages.

At the risk of sounding like a broken record, when choosing ETFs, always look under the hood, utilize a strategy, stay diversified and keep up with current global economic news. Although these funds have crossed their trend lines, you always want to consider if they’re right for you and your goals, since everyone is different. If you want to track the performance of your ETFs, take a look at our ETF analyzer.

Kevin Grewal contributed to this article.

Tags: AAXJ, Asia, China, EFA, Emerging Markets, Europe, FXI, Global ETFs, Japan, Sector ETFs, Trend Following, United Kingdom, VEU