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Greece on Monday found that it had no problem finding demand in a much-anticipated bond sale. The European Union in the past weeks had been closely watching the country and its debt problems with increasing concern. The success of the bond sale was important to the EU because if Greece had faltered in selling bonds to cover its disturbingly high debt levels, it would have been negative for the whole regional bloc.

The risk of default by Greece in the short term is now seen as significantly decreased but the country will have to reign in spending going forward to bring its debt levels into alignment with European Union standards. For now though, the success of the bond sale has generated confidence in the country’s ability to at least finance itself through 2010.

Although the EU now does not have to fear the burden of bailing out a defaulting Greece in the short-term, I still think that investors should be wary of investing in broader all-European ETFs. Instead, ETF investors can still do better by choosing specific European country funds.

My favorite among the country-specific Europe ETFs is still iShares MSCI Netherlands Investable Market Index (NYSEARCA:EWN). This is because it retains its position as the best in this group for momentum ranking. It also is minimally exposed to financial companies, which I see as risky in Europe right now while multiple economies in the bloc beyond Greece still grapple with debt and other economic issues. The fund also has a large allocation to the relatively safe consumer staples sector. Its largest holding in this sector and in the fund is Unilever (NYSE:UL), which accounts for 17.6% of the ETF.

European countries are probably not the best place to look for international diversification in an ETF portfolio at the moment, but for exposure to the country, EWN is the best bet right now. The fund, along with many other European country ETFs fell significantly with world markets at the end of last week so there may be a buying opportunity on EWN at present for those that have confidence world markets will not fall further this week.

Disclosure: no positions

Source: Netherlands ETF Best Way to Gain European Exposure