The Vanguard European Stock ETF (AMEX:VGK), previously known as Vanguard European Stock VIPERs, tracks the MSCI Europe Index. This ETF offers broad exposure to companies in Western Europe -- at a very low 0.18% expense ratio.

Total assets of the fund are more than $1.2 billion, and the year-to-date return is just over 25%. Large-cap companies make up about 85% of the fund's investments, while midcaps account for most of the remaining assets. Holdings from the United Kingdom, France, Switzerland, and Germany compose the majority of the fund. More than half of its assets lie in three sectors, with financial services making up roughly 30% and industrial materials and energy accounting for close to 12% each.

Beside the standard mantra of diversification, some of the current arguments for adding European exposure to your portfolio include a weakening dollar and strengthening euro, along with a European Central Bank that appears willing to raise rates. The Federal Reserve, on the other hand, may be done with higher rates for the moment, so the yield advantage of holding dollars over euros may decline, pushing some investors toward European opportunities. In another trend that has the potential to boost European equities, central banks worldwide are diversifying away from dollar reserves; China and Russia in particular are seeking non-dollar holdings.

In addition to VGK, several other ETFs offer similar exposure to European large-cap companies, and all are up over 21% so far this year. These options include iShares MSCI EMU (AMEX:EZU), streetTRACKSDJ euro STOXX 50 (NYSE:FEU), the iShares S&P Europe 350 (AMEX:IEV), and the BLDRS Europe 100 ADR (NASDAQ:ADRU).

If you want to be more targeted and less diversified in your European investments, there are also ten iShares ETFs that track individual European countries. Be forewarned that if you do select a single country fund, the country that is doing well today stands a good chance of relinquishing that position tomorrow.

A diversified international investment approach can reduce volatility and provide competitive returns, and there are a number of ETF choices for investors who want exposure to the returns of Western European stocks. VGK can give your portfolio some continental flair and -- with its low fees and solid returns -- an investor would be foolish not to consider this fund when looking to invest beyond the U.S.

Looking for other great investment destinations? Try Global Gains, our international stock newsletter, free for 30 days.

Fool contributor Zoe Van Schyndel lives in Miami and enjoys the sunshine and variety of the Magic City. She does not own shares in any of the funds or companies mentioned in this article. The Motley Fool has a disclosure policy.