By: Jack Colombo

Editor, Forbes/Lehmann Income Securities Investor

Wherever you turn, theres some doomsday scenario lurking in the shadowsand until that changes, youre best to use ETFs to diversify the risks that come along with these worries, writes Jack Colombo of the Forbes/ISA Closed-End Fund and ETF Report .

It seems that most of the world is suffering the uncertainty surrounding the European debt crisis. The US financial system has guaranteed a lot of Greek debt, and would be on the hook for billions if a formal default were declared.

China is obviously having its own problems with a slowing growth rate. And Japan is still dealing with the after effects of the earthquake, tsunami, and nuclear meltdown.

Like last month, world markets have been roiled and volatile with shifts between risk-on and risk-off speculations alternating almost on a daily basis.

One way to avoid some of the rollercoaster effects of this uncertainty is to invest some assets in both the risk-on and risk-off markets.

This months international winners were distributed throughout the globe. The best performer was the Aberdeen Chile Fund (CH ), which was up 13.45%.

Two Turkey funds made the top performers list. The iShares MSCI Turkey Index Fund (TUR ) was up 11.48% and the Turkish Investment Fund (TKF ) was up 10.07%.

Vietnam and Peru also made the list, with gains of 7.13% and 6.86% respectively. With the exception of the Spain Fund (SNF ), the winners come from the area of the globe least affected by the European economic crisis.

The losers were easy to categorize. The reported China growth slowdown was all too evident in the top losers group, with losses ranging from 6% to 12%. The worst was the First Trust China AlphaDEX Fund (FCA ), down 12.98%, followed by the IQ Hong Kong Small Cap ETF (HKK ), down 12.27%

Two Picks

The Clough Global Equity Fund (GLQ ) is currently trading at $11.56, a discount of more than 13% from its net asset value. The fund currently yields 10.3% and pays quarterly.

It invests in a mix of global securitiesmostly equity, but about 20% in income-producing securities. It may also use options and short sales to enhance portfolio returns.

The fund has flexible investment rules, and is currently 56.97% invested in US securities, followed by a 21.12% investment in foreign stocks. The goal is total investment return plus income.

Its largest sector investment is in utilities at 18.55%, followed by energy, oil services, and drillers at 13.95%. It uses leverage, and is currently leveraged at 37% of assets. The next ex-dividend date is in mid-October.

The ING Emerging Markets High Dividend Equity Fund (IHD ) was launched in April 2011. The fund invests in dividend-paying stocks of emerging countries and seeks to reduce volatility of total returns by selling call options on emerging-market index ETFs, international, regional, or country indices, and/or equity securities.

This diversified approach produces a yield of about 13%. The fund currently trades at $12.38, a discount of 10.48% from its net asset value.

The fund invests 19.79% of its funds in China, followed by Brazil at 17.10% and South Korea at 11.61%. Its largest sectors are financials at 22.39%, followed by energy at 14.81% and information technology at 11.36%. The fund is not leveraged and pays dividends quarterly.

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