If they’re smartly played, country-specific exchange traded funds (ETFs) can deliver rewards.

Country-specific ETFs, such as iShares Austria (EWO), give investors a great way to take advantage of growth in regions such as Eastern Europe. Two years ago, we made a small bet on EWO because we liked the exposure to Austria as well as the fast-growing emerging markets elsewhere in the area. We knew this ETF was a gamble because of its highly concentrated two-dozen stocks, making it susceptible to price swings. We watched the ETF jump 28% before selling it in 2006.

After walking through the streets of cities such as Prague with my family last Summer, I took notice of bank branches filled with customers and the numerous ads for cell phones, many of which were offerings from companies in EWO’s portfolio.

Advisors are using these country-specific ETFs in a variety of ways, reports Rob Wherry for SmartMoney, from a substitute for individual stock picking to getting boosted returns away from a generic, broad-based ETF. Such strategies can hold the hopes of big returns but they are also carrying different levels of risk, so be sure to do your research.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.