Despite the frantic headlines, it shouldn’t be terribly surprising to see domestic equity benchmarks struggling to continue their steep ascent this year — especially considering the truly impressive returns seen across Wall Street in 2013.

While the recent economic slowdown at home has been largely attributed to the uncharacteristically harsh winter weather, one headwind that likely isn’t going away with the spring thaw is the fear of rising interest rates.  Many have come to realize that rising rates are synonymous with improving growth. Nonetheless, the anticipation of the rate hike itself has proven to be enough to inspire volatile trading and will likely prompt further profit-taking as investors are reminded of the inevitable tightening in monetary policy.

So what’s an investor to do if they are eager to deploy capital in the equity markets amid this environment? The answer might be simpler than you expect. If tightening monetary policy is making it harder to navigate the domestic landscape, investors ought to consider opportunities abroad.

More specifically, investors should consider securities that can benefit from the prevailing monetary policy in the euro-bloc region. Why? Because while investors at home are gearing up for tightening, those in the overseas currency bloc are looking forward to more stimulus, as evidenced by the European Central Bank’s continued hints that it will remain accommodative and look to do more if inflation remains persistently low.

In light of the diverging policy paths of the Federal Reserve and the ECB, investors can try to take advantage of this by jumping into equities that stand to benefit from the more accommodative policy overseas. Thanks to the proliferation of ETFs, investors can now easily target entire countries through the use of a single ticker.

As such, below we highlight two emerging markets that currently present an opportunity for investors to geographically diversify their portfolio’s equity component while at the same time favorably positioning themselves in anticipation of an improving recovery in the euro zone, and perhaps even another round of stimulus.

Poland

The iShares MSCI Poland Capped ETF (EPOL) is the most popular option when it comes to accessing the Polish economy. Investors might find this country-specific ETF attractive for a number of reasons. First and foremost, EPOL offers tangential exposure to the recovery in Europe, which is expected to pick up steam. More impressively, however, this nation avoided the last credit crisis; its debt/GDP figure currently stands below 60%, and its economy is expected to grow by more than 3% in 2014, making it much more fundamentally-sound and attractive than many of its developed-counterparts from the region.

Also, we favor Poland over other emerging markets because it’s not highly leveraged to commodity prices and is more dependent on Germany than it is on China, whose economic growth is impressive but nonetheless volatile.

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From a technical perspective, EPOL has been charging steadily higher within an upward sloping channel since bottoming out in mid-2012. This presents an attractive opportunity to establish a bullish position during pullbacks for those with a stomach for risk and a long-term investment horizon.

Turkey

The iShares MSCI Turkey ETF (TUR) is currently the only option when it comes to accessing the Turkish economy. Investors might find this country-specific ETF attractive for a number of reasons. First and foremost, this ETF has endured a nasty downtrend, which might be setting it up for an even bigger rebound. We feel this may be the case seeing as how the catalysts behind its sell-off, which began in late May of 2013, are running out of steam. One of the reasons behind the steep pullback here is political unrest in the country, as evidenced by violent protests in response to the government encroaching on personal freedoms. This headwind appears to be waning as protests have simmered down with Turkey’s presidential elections on the horizon in August of this year.

The second reason behind TUR’s downturn was the Fed-induced taper scare on 5/22/2013, which inspired a wave of profit taking in emerging markets across the board; fears of rising rates have largely subsided and selling pressures appear to be exhausted as evidenced by TUR’s encouraging price action in 2014.  In terms of fundamentals, Turkey’s economy is largely dependent on developed Europe, which is still plagued with anemic growth but appears to be turning the corner nonetheless; as such, any additional stimulus from the ECB should resonate well for this ETF.

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From a technical perspective, TUR appears to have found support above $40 a share, the same level that it managed to rebound off in early 2012 before staging an impressive multi-month rally. Similar to EPOL, the Turkey ETF presents an attractive opportunity to establish a bullish position during pullbacks for those with a stomach for risk and a long-term investment horizon.

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Learn more about ETF database here.

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Wondering what impact mid-term elections will have on U.S. stocks? Read Jeff Hirsh’s article in the Spring TraderPlanet Journal.