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Canadian investors have long and justifiably been criticized for not having enough exposure to global stock markets.

It turns out the exchange-traded fund companies are guilty of exactly the same thing. The third instalment of The Globe and Mail ETF Buyer's Guide was initially meant to cover international funds, or those covering developed stock markets outside North America. But the small number of funds in this category left room for more.

As a result, you'll find emerging markets covered here, as well as global dividend funds. Country-specific funds were left out on the basis that they're more for speculation and not a core investment.

One thing you won't find in this list is a wide selection of global funds, which are an all-in-one way to get exposure to broad stock market indexes in the United States and elsewhere. The mutual fund industry has lots to offer in global funds, but ETF companies have almost ignored the category. As a result, you'll likely need to partner an international ETF with a U.S. fund to complement your Canadian stock holdings.

And now for a quick word about currency hedging, which cuts the distortion in returns caused by our dollar's ups and downs versus global currencies. Hedging adds to your investing costs in some cases, and it can undermine returns a bit by causing what's known as tracking error. It's useful to have hedging when the Canadian dollar is rising, but you'll find it a drag on returns when our currency is falling. ETFs that are hedged typically have the term "CAD hedged" in their name, with CAD being an investment industry short-form for the Canadian dollar.

ETFs are a low-fee version of mutual funds that trade like a stock. Traditionally, ETFs tracked major stock and bond indexes; today, many funds follow more obscure indexes or have a manager who picks stocks. To invest in ETFs, you need a brokerage account. For help on that, consult my latest ranking of online brokers.

The ETF Buyer's Guide has already covered Canadian equity ETFs and U.S. equity ETFs. To come in the weeks ahead are bond ETFs and Canadian dividend and diversified income ETFs. Here are some explanations of the terms you'll find in the guide.

Assets: Shown to give you a sense of how interested other investors are in a fund; unless they're new, the smallest funds may be candidates for delisting.

Management expense ratio (MER): The main cost of owning an ETF on an ongoing basis; as with virtually all funds, published returns are shown on an after-fee basis.

Trading expense ratio (TER): The cost of trading commission racked up by the managers of an ETF as they shuffle the portfolio to keep it in line with a target index; add the TER to the MER for a fuller picture of a fund's cost. Note many ETFs do so little trading that their TERs round down to zero. Full year 2012 numbers are presented here.

Dividend yield: Mainstream indexes can be a good source of dividend income

Average 30-day daily trading volume: Trading of less than 10,000 shares per day on average tells you an ETF isn't generating much interest from investors.

Top-three country and sector weightings: International ETFs vary a fair bit in terms of which countries and sectors they emphasize.

Top three stocks: Another view on what's inside an ETF.

Click here for a printable excel table.

* Note: Management fees only, shown for newer funds that do not yet post a full MER (management fees are a component of MER).
Sources: ETF company websites, Globeinvestor.com

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