Get ready to spend a little of your fun money as I assemble an exchange-traded fund (ETF) portfolio that in addition to being remarkably diversified, will also own retail stocks from every continent except Antarctica, which the last time I checked, didn't have any publicly traded companies. In just six holdings, Here's everything you need for a global retail portfolio.

IN PICTURES: 10 Reasons To Add ETFs To Your Portfolio

Europe
The largest European retailer is also the second largest global retailer. France's Carrefour Group operates four different grocery store formats in 34 countries. With more than 475,000 employees serving a network of 15,500 stores, it's a force to be reckoned with. In the first six months of 2010, constant dollar revenues grew by 1.5% (excluding gas), an excellent performance, considering the European economy. One of the best way to play Carrefour is to buy the SPDR Euro Stoxx 50 ETF (NYSE:FEZ), which tracks an index comprised of 50 of Europe's biggest companies.

Asia
Seven & I Holdings Co. is Asia's largest retailer with 2010 revenues of $62.8 billion. Although most investors associate it with the Seven-Eleven convenience store chain, it's actually much more. Seven-Eleven stores account for 38.3% of revenues, Ito-Yokado superstores another 39.2% and department stores the bulk of the remainder. It has its hands in many pies in both Asia and other parts of the world, including North America, where its U.S. subsidiary is currently exploring a possible deal to buy Casey's General Stores (Nasdaq:CASY).

Canadian convenience store operator Alimentation Couche-Tard abandoned its bid for Casey's at the end of September, and Seven-Eleven will likely (if they're smart) do the same now that Casey's is loaded with debt. My recommendation is the WisdomTree Japan Hedged Equity Fund (NYSE:DJX), which tracks the index of the same name. Seven & I Holdings is the 17th biggest position in the ETF out of a total of 300 stocks. I like this ETF because equities in Japan are cheap right now and with the Japanese government stepping in to halt the appreciation of the yen, it should help the hedged ETF.

Australia
Woolworth's is the world's 22nd largest retailer with 2010 revenues of $51.6 billion. In addition to its supermarkets, it operates liquor stores, electronics stores, gas stations, hotels and home improvement centers. Although similarly named, it's not related to the former F.W. Woolworth Company. In terms of ETFs, the best I can do as far as including other parts of Asia is to suggest the WisdomTree Pacific ex-Japan Total Dividend Fund (NYSE:DND), which has 27% of its holdings invested in Hong Kong and another 11% in Singapore, in addition to the 62% from Australia and New Zealand. If you must, add an emerging market ETF to acquire China, India and Russia.

Africa
It shouldn't come as a surprise that a grocery store chain is Africa's largest retailer. All six continents have grocery-driven businesses at the top of the list, including Shoprite Holdings of South Africa. The retailer had an excellent fiscal 2010, with a revenues increase of 13.6% year-over-year. Most impressive is its 41.9% return on equity. And it's still growing.

However, Walmart (NYSE:WMT), the world's largest retailer, recently made a $4.1 billion offer for MassMart, a competitor in South Africa. The best ETF owning Shoprite is the SPDR S&P Emerging Middle East & Africa ETF (NYSE:GAF), which tracks the S&P Mid-East and Africa BMI Index. Shoprite is the tenth largest holding in a portfolio that is primarily comprised of South African companies, with a few Egyptian and Moroccan stocks thrown in for good measure. It's not what I'd call a complete representation of Africa but it'll do.

South America
Supermarkets once again lead the way with Grupo Pao de Acucar, a Brazilian retailer whose 2009 annualized revenues were $28 billion. It's in a heated battle with both Carrefour and Walmart in Brazil, where the three companies share almost 40% of the market. With 300 stores opening in the next three years, which should provide an estimated 8% in annual revenue growth, Grupo Pao de Acucar has a bright future.

Its stock trades on the New York Stock Exchange as an ADR so there is a direct way of investing but since we've been looking at ETFs, my suggestion is the SPDR S&P Emerging Latin America ETF (NYSE:GML), which gives you exposure to Brazil, Mexico, Chile and Peru and the 107 large cap stocks that come with it.

North America
Sam Walton would hardly recognize his company today. The world's largest retailer never seems to be able to avoid controversy. Most recently, it dropped its profit-sharing plan that contributed as much as 4% extra to employee pay and replaced it with a 6% 401(k) match. This might be good for shareholders in the short term but it will backfire in the long term. Whatever it does, people will keep shopping there. My recommendation is that you buy Merrill Lynch Retail HOLDRs (NYSE:RTH), a trust that owns 18 retail stocks, including Walmart.

Bottom Line
With the use of six exchange-traded funds, you have global exposure to retail while maintaining a diversified portfolio. (To take full advantage of these vehicles, you need to know how they can fulfill certain strategies. Check out How To Use ETFs In Your Portfolio.)

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