We think conservative investors could hold up to 10% of their portfolios in foreign stocks. One way to do that is to buy carefully chosen exchange traded funds (ETFs) that have an overseas focus.

Here are two low-fee exchange traded funds that cover two of Asia’s most mature markets.

ISHARES MSCI JAPAN INDEX FUND (New York Exchange symbol EWJ; buy or sell through brokers; us.ishares.com) is an exchange traded fund that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan index.

The ETF’s top holdings include Toyota, 6.6%; Mitsubishi UFJ Financial, 3.1%; Sumitomo Mitsui Financial, 2.4%; Softbank Corp., 2.4%; Honda Motor, 2.3%; Mizuho Financial Group, 1.9%; Japan Tobacco, 1.5%; Takeda Pharmaceutical, 1.4%; Canon, 1.3%; and Hitachi, 1.2%.

The fund’s industry breakdown is as follows: Financials, 21.4%; Consumer Discretionary, 21.1%; Industrials, 19.6%; Information Technology, 9.6%; Consumer Staples, 6.3%; Materials, 6.2%; Health Care, 5.9%; Telecommunication Services, 5.1%; Utilities, 2.8%; and Energy, 1.2%.

iShares MSCI Japan Index Fund was launched on March 12, 1996. Its expense ratio is 0.50%.

The fund rose 42%, from $8.75 in November 2012 to $12.43 in mid-May 2013, as the yen fell against the U.S. dollar, which boosted Japanese exports. Under Prime Minister Shinzo Abe’s so-called “Abenomics” strategy, the Bank of Japan pumped more money into the country’s economy.

The fund dipped to $10.40 in June, along with many Japanese stocks, but it has since rebounded to today’s price of $11.52.

ISHARES MSCI SOUTH KOREA INDEX FUND (New York Exchange symbol EWY; buy or sell through brokers; us.ishares.com) is an exchange traded fund that aims to track the MSCI Korea Index.

The ETF’s top holdings are Samsung Electronics, 21.3%; Hyundai Motor Co., 6.2%; Posco (steel), 3.4%; Hyundai Mobis (auto parts), 3.2%; Shinhan Financial, 3.0%; Kia Motors, 2.8%; SK Hynix Semiconductor, 2.5%; Naver Corp. (Internet content), 2.5%; LG Chemical, 2.1%; and KB Financial, 2.2%.

The fund’s industry breakdown is as follows: Information Technology, 31.4%; Consumer Discretionary, 19.0%; Financials, 14.2%; Industrials, 13.8%; Materials, 10.5%; Consumer Staples, 5.1%; Energy, 2.6%; Utilities, 1.5%; Telecommunication Services, 1.0%; and Health Care, 0.8%.

iShares MSCI South Korea Index Fund was launched on May 9, 2000. It has an expense ratio of 0.60%.

South Korea has Asia’s fourth-largest economy after China, Japan and India. The country is heavily reliant on exports, and China is now its biggest market. South Korea’s exports to China have begun to rebound, as have its sales to the U.S. and Europe.

The steady rise of South Korea’s currency, the won, hurt its economy last year and earlier this year by making its goods more expensive for foreign buyers.

South Korea recently elected a new president, Park Guen-hye, the daughter of Park Chung-hee, the country’s dictator from 1961 to 1979.

South Korea’s communist neighbour, North Korea, remains a serious threat. But China wants peace in the region, and North Korea needs China’s continued goodwill for food and military aid.

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In the latest issue of Canadian Wealth Advisor, we look at the prospects for these two ETFs and the stocks they hold based on the outlook for the currencies of the two nations. We conclude with our clear buy-hold-sell advice on both of these exchange-traded funds.

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After years of growth applauded by many Western observers, China’s economy has slowed down. Do you invest in China through ETFs or some other method? Or do you prefer to invest in more conventionally free enterprise economies like those of Japan and South Korea? Is your decision to invest in an overseas market affected when the government plays a dominant role in the economy?