Stalking a Tiger

Asian and other emerging-markets funds are flying again. But risks abound. Think long term

Investors wagering on developing markets in Thailand, Brazil, China, Russia and other far-flung lands have been underwater a long time. A $1,000 investment in an average emerging-markets stock fund in June 1994 would be worth about $900 today. Maybe they should be called submerging markets. This year, though, the world's economic trouble spots have come up for air--and suddenly we have the re-emerging markets.

Call them what you will. The name game simply underscores the up-and-down nature of funds that invest in developing regions. Risk has rewards: emerging-markets funds are up an average of 32% this year, beating the Standard &...

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