The Mexican peso's tumultuous drop has been felt primarily in Mexico. But if you're an American owner of Mexico stocks or mutual funds that invest there, you could be smarting from the sting.

Many investors who jumped into Mexico and other so-called "emerging markets," reaping double-digit returns in 1993, now are experiencing the risks and pain of foreign stock ownership.The value of Mexican holdings owned by American investors has fallen by billions of dollars in a matter of days.

There were signs this week that the Mexican turmoil might be abating somewhat. The peso and Mexican stocks recovered some lost ground amid possible signs of peace from insurgents in southern Mexico and word that an International Monetary Fund delegation was visiting Mexico City.

Nonetheless, the Mexican stock market has lost in dollar terms 44 percent this year. In 1993 it rose 47 percent, prompting enthusiasm among American investors at a time when interest rates at home were at 25-year lows.

In late October, there was $55 billion in foreign investments in the Mexican stock market and 75 percent of that was U.S. money, said Lars Schonander, Latin America economist at Baring Securities Ltd.

With the peso drop, people lost about one-third of their holdings, adding up to significant losses.

Investors in mutual funds that specialize in the fledgling markets of Latin America also have been hurt by the Mexico debacle. Many have lost between 6 percent and nearly 20 percent since early last week.

Still, there has been little evidence so far that investors in this species of mutual funds are bailing out. At Fidelity Investments Inc., the nation's leading mutual fund company, redemptions in international funds have been "very modest," said Connie Hubbell, a spokeswoman.

Fidelity's New Markets Income fund, however, had seen redemptions on the order of 23 percent of assets as of Wednesday, Hubbell said.