The Australian Financial Review reported on Monday that Sydney-based Platinum Asset Management Limited (ASX: PTM) is defying global pessimism towards European bank stocks by increasing its exposure to the region’s financial system. The move comes despite European bank stocks accounting for almost half the fund manager’s losses this year.

Whilst I am not convinced about the move to buy bank stocks in particular, I do see value in buying European stocks in the aftermath of Brexit.

I believe the best way to play this thematic is to buy exchange traded funds (ETFs).

European ETFs

European ETFs are a dime-a-dozen with most global fund managers offering exposure to the region.

For example, BlackRock offers the iShs Europe CDIs (ASX: IEU), whilst Vanguard has the Van FTSE Europ Shs (ASX: VEQ), both of which track European stock indices.

Whilst both ETFs track slightly different indices, they comprise of similar holdings given the weighting of large stocks in European markets. Accordingly, most European ETFs offer simple diversification and exposure to a range of leading European companies like pharmaceutical giants Roche Holding AG, Novartis AG and GlaxoKlineSmith Plc.

All world ETFs

Another ETF to consider is Vanguard’s Vg Ex-US In ETF (ASX: VEU). Though strictly not confined to European stocks, this ETF offers exposure to all world markets (excluding the US).

Like other ETFs concentrating solely on Europe, the Vg Ex-US International ETF has large holdings in blue chip European stocks Novo Nordisk A/S, Royal Dutch Shell Plc and Lloyds Banking Group Plc (as well as others mentioned above).

However, it also provides exposure to Asian and emerging markets through substantial holdings in global leaders Toyota Motor Corp, Tencent Holdings Ltd and HSBC Holdings Plc.

Foolish takeaway

Like most Australian investors, my portfolio is heavily biased to the S&P/ASX 200 Index (ASX: XJO) with companies like BHP Billiton Limited (ASX: BHP), National Australia Bank Ltd (ASX: NAB) and Telstra Corporation Ltd (ASX: TLS) taking up a good chunk of my total wealth.

While I do see solid futures ahead for these Australian companies, a balanced portfolio requires exposure to international stocks for diversification against systematic shocks to the Australian economy. Accordingly, investors should look to capitalise on weakness in overseas markets whenever they can (such as in the Brexit aftermath).

Instead of individually selecting international shares like Nestle AG, Diageo Plc and Anheuser-Busch InBev or European bank stocks, I believe the best way to gain wide-reaching international exposure is through ETFs like Vanguard’s Vg Ex-US International ETF.

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Motley Fool contributor Rachit Dudhwala has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.