Chet Currier on Emerging Market Risks

Chet Currier discusses the risks of emerging markets investing in his latest Bloomberg column:

It's always nice to see patience rewarded in investing -- and even nicer if it happens without a long wait.

Just ask investors, myself included, in mutual funds and exchange-traded funds that specialize in emerging-markets stocks. We have enjoyed just such a happy experience in 2006.

A knockout punch of selling in May and June wiped out about 25 percent of our money. But as a timely Bloomberg News story noted on Tuesday of this week, by early December we got it all back.

This further down the piece:

Lists of the top-performing U.S. mutual funds in 2006 bristle with single-country and regional funds from within the emerging-markets realm. A Bloomberg screen I looked at recently of the top 15 funds through early December included four China funds, two Russia, and one each from Mexico, the Caribbean Basin and Singapore.

One of the top gainers, the closed-end Greater China Fund (GCH) managed by Baring Asset Management Inc., sported a return of 89 percent since last New Year's.

GCH 1-yr chart