According to the Investment Company Institute, assets in global-equity exchange-traded funds as of November 2006 have increased 56% since December of 2005, to $102 billion. Many of these funds have posted strong returns over the past several years, and naturally, investors are following. With more than 80 global-equity ETFs on the market, they have no shortage of choices.

To understand the popularity of these funds, just look at the iShares FTSE/Xinhua China 25 Index Fund (NYSE:FXI) -- say that to your broker 20 times fast -- which has posted a 83% return in the past year. Numbers like that tend to get people's attention.

Other reasons for the growth of global ETFs are that they're easy to trade and have lower fees than traditional mutual funds carry. In one trade, you can invest in market giants around the world via the streetTRACKS DJ Global Titans (AMEX:DGT), or you can get a little risque and buy some China-focused PowerShares Golden Dragon Halters (AMEX:PGJ).

Rather than invest in a single-country fund, you might want to consider something like the BLDRS Developed Markets 100 ADR Index (NASDAQ:ADRD), which offers broad diversification and a low expense ratio of 0.30%. The fund's top three holdings as of November 2006 were involved in energy, financial services, and automobiles: BP (NYSE:BP), HSBC (NYSE:HBC), and Toyota (NYSE:TM).

Don't expect to achieve market-beating returns with global or international ETFs, however. These investment vehicles are designed to replicate stock-market returns of the country or region they're designed around.

Foreign stocks tend to rise and fall in different cycles from U.S. stocks, so having some overseas exposure can help out your portfolio's performance. Of course, there's no guarantee that the returns of any international funds you invest in will remain positive, with some emerging markets having their troubles. (And trouble in this context would be -- ahem -- another word for a decline in value.)

There's a saying on Wall Street: "There are bulls and there are bears, but pigs get slaughtered." If you can avoid being piggy about performance, maybe you, too, can avoid a financial bloodbath. Look to use global ETFs to enhance your portfolio's diversification, but do remember that global equity markets have experienced considerable volatility in recent months.

To learn more on ETFs -- including ETF strategies, visit our ETF Center.

To cruise through overseas stock ideas, start up a free 30-day trial to Global Gains -- our new international-investing newsletter.

This article has been updated by Foolish research associate Katrina Chan and was originally published on Aug. 14, 2006 by Fool contributor Zoe Van Schyndel. Neither Katrina nor Zoe owns shares in any of the funds or companies mentioned in this article. The Motley Fool has a full disclosure policy.