The Daily Screen: The Best Japan Mutual Funds

If Japan funds seemed like Love Story last year, they turned into Fatal Attraction this year.

In 1999, the buying frenzy in tech stocks and high hopes for Tokyo's economic reform plans helped push the average Japan fund to a 115.7% return. But this year investors haven't been as eager to keep paying thin-air valuations for tech stocks that are priced to perfection and those snazzy reforms haven't really materialized. So, the average Japan fund is down 23.7% this year, highlighting the fact that for most investors, a broadly diversified foreign stock fund might be a better idea.

While Japan funds, the focus of today's Daily Screen, do have last year's kind of home run potential, they're a feast-or-famine performer. Last year they beat the average foreign stock fund, itself up a solid 44.5%, but they managed that feat only one other time in the 1990s. They lost money in 1995, 1996 and 1997, too. ...