These China Mutual Funds Keep Soaring

Editor's note: This is the first of four articles reviewing the third quarter in mutual funds.

Mutual funds that invest in Chinese stocks were one of the few bright spots in the third quarter as the impact of the U.S. subprime mortgage crisis spread far and wide.

But while most domestic stocks finished the quarter much more attractively valued than they started it, valuations of Chinese stocks have reached what some would consider nosebleed territory.

Mutual funds that invest in Asia excluding Japan were the single best performing category tracked by Morningstar in the third quarter, surging 22% on average. ...