Best, Worst Geographically Focused Funds

U.S. stocks are mired in a sideways trading range. So, while the domestic market sorts itself out, let's look at geographically focused funds that have picked the best and worst corners of the planet.

Winning a pre-Olympics gold medal, the (CAF)Morgan Stanley China A Share Fund grew 7.76% in the five trading days ended Thursday. Major investments in construction continue to be rolled out in Beijing prior to the 2008 Olympic Summer Games.

This is helping to stimulate an already heated Chinese economy growing at a real year-to-year rate of 11.9% as of June 30. That's China's highest rate of growth since December 1994, and more than six times the corresponding U.S figure of 1.8%.

The top-performing holding of Morgan Stanley China, Shanxi Xishan Coal and Electricity Power Co., soared 19.25% in the past week on the rebounding price of coal. Regardless of the doubling of China's budget for energy-saving projects, China's fast-growing economy should keep Shanxi Xishan's products of coal and electricity in high demand.

Doing nearly as well, up 18.64%, Hudong Heavy Machinery Co., supplies diesel engines and other machinery to China's shipbuilding industry. Even after a record number of ship deliveries, orders for Chinese ships rose to a record in the first half of 2007, adding a record-level backlog of ships to be built. Planned shipyard expansion bodes well for continued growth at Hudong.