China-region funds offer returns, risk
By HOPE YEN
AP BUSINESS WRITER
NEW YORK -- Lured by the promise of China's growing economy, many investors are turning to mutual funds geared specifically toward investments in that region. But advisers warn that the potential for big returns comes with high risks and volatility.
China-region mutual funds typically invest in mainland Chinese companies, although they can also include businesses in Hong Kong, Singapore and Taiwan.
So far in 2003, the nine funds tracked by Lipper Inc. have been returned about 56 percent, compared to a little more than 20 percent for the Standard & Poor's 500 index and 27 percent for Japan funds.
The performance by China-region funds was competitive with gold funds, which surged 62 percent, and tech funds, which climbed 55 percent. Latin America funds, another strong emerging market sector, trailed at 47 percent.
Investors have responded, tripling net inflows into China-region funds since March, according to Lipper. Total assets have jumped from $582.5 million at the end of 2002 to 1.5 billion through October, partly due to market appreciation of the shares.
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