Some ETF investors nervous about the looming U.S. fiscal cliff are looking at international markets for better growth opportunities and diversification.

There are many low-cost funds that provide straight, market-cap-weighted exposure to developed countries and developing markets.

However, one analyst recommends investors take a lower-risk approach to investing abroad with ETFs that employ low-volatility and dividend strategies.

For Europe and other developed markets, Morningstar ETF Investor newsletter editor Sam Lee says he likes iShares MSCI EAFE Minimum Volatility (NYSEArca: EFAV). Launched in October 2011, the ETF has $196.6 million in assets. The fund holds 172 stocks and charges an expense ratio of 0.2%, according to manager BlackRock (NYSE: BLK).

The ETF selects the least-volatile stocks in the MSCI EAFE Index, a popular benchmark for international developed markets. EAFE stands for Europe, Australasia and Far East.

Historically in back tests, the specialized benchmark has had about one third to one fifth less volatility in the market-weighted EAFE Index, Lee notes. Volatility is a measure of a security’s tendency to jump around in price. [Low-Volatility ETFs vs. Dividend ETFs]

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