According to research from Standard & Poor’s, global exchange traded funds following individual countries can be used as an alternative to sector investing.

Investors have the ability to gain more exposure to specific industries through ETFs tracking single-country benchmarks. These funds can also provide a good diversification tool within a portfolio.

“We think a creative alternative to investing in industry sectors is through country ETF securities. We think this is a way to gain a higher percentage exposure to specific industries or sectors that an investor may favor,” wrote S&P analyst Kenneth Leon in a recent note.

“For example, some country ETFs can be viewed as more defensive, with holdings concentrated in consumer staples, health care, telecom and utilities, while other country ETFs may have high concentrations of holdings in financials or the energy and material sectors,” Leon added. “In our opinion, country ETFs may provide investors geographic diversification in their portfolios away from U.S. equities, with an added kicker of high concentrations in select sectors.”

For example, the iShares MSCI Canada (NYSEArca: EWC) is a defensive, commodities-driven investment play. Financials, energy and materials are the top sectors represented. Canada has managed to outperform international equities this year, [Canada ETF Higher as Investors Await GDP]