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Emerging-markets funds performing well this year

SHARE Emerging-markets funds performing well this year

CHICAGO (Morningstar.com) Single-country emerging-markets funds that focus on Russia, China, Korea, Mexico, and Thailand have thrived thus far in bleak 2001. Pilgrim Russia (LETRX) and Matthews China (MCHFX) have gained 41 percent and 28 percent, respectively, for the year to date through July 19. Matthews Korea (MAKOX) is up 20 percent.

The exchange-traded funds and closed-end funds that favor Russia, China, and Korea also have prospered this year, as have those that concentrate on Mexico or Thailand. For example, Mexico Equity Income (MXE) and Thai Fund (TTF) both have returned 11 percent.

These gains are attractive in their own right, of course, but they look especially alluring in light of the ongoing poor performance of most international offerings. The typical foreign-stock fund has plunged 17 percent this year, in fact, while the average diversified emerging-markets fund has fallen 8 percent.