Thanks to the sagging euro and a hearty appetite for phone stocks, Europe funds are getting their bell rung these days.
A tumbling euro -- the currency of the unified European nations that has been consistently testing its lows -- hurts U.S. fund investors. Whether the European stocks these investors own go up or down, when Europe funds convert their shares to dollars, they're worth less than when they started due to the euro's falling value vs. the dollar.
To make matters worse, these funds typically focus on big-cap growth stocks in the technology and telecommunications sectors, which are both under water this year.
, three big telecom/wireless holdings among Europe funds, are down 19.8%, 20.8% and 27.3%, respectively, so far this year, according to
Between these sector bets -- which helped Europe funds beat the
last year with a 24.9% average return -- and the euro's tumble, these funds are down more than 9% on the year, according to
But there's reason to think these tough times aren't going to go on forever. After all, European funds did beat the S&P 500 in 1993, 1994, 1996 and 1999. And despite the euro's current malaise, many still believe that a single currency clears the path for increased cross-border expansion and consolidation.
So, if you like the idea of investing in the region and you're not too daunted by Europe funds' current tumble, here's a list of funds you might consider. Here are 10 Europe funds that have beaten their average peer over the last one- and three-year periods, sorted by their one-year returns.
At the top of the list you'll find no-load
Deutsche European Equity. How did the fund post that fat 141% gain? In the first quarter it played lucratively in the IPO market, to the tune of a 105% gain. Since then the fund has focused on more tame, blue-chip fare.
If you're looking for a value or less aggressive approach, check out broker-sold
Mutual European, part of value shop
product line. The fund also gives you more small- and mid-cap exposure than most others.
If you're looking for a more aggressive approach, look at telecom-heavy, no-load
Invesco European and broker-sold
AIM Euroland Growth, which share co-manager Steven Chamberlain. For an idea of how he invests and where he sees opportunities, check out this
10 Questions interview with the London-based manager.
And if you're a die-hard indexer, you should consider the
Vanguard European Stock Index fund, which tracks the mostly big-cap
MSCI Europe Index
. Though the fund has lagged a bit over the last year, it beats its average peer over the last three-, five- and 10-year periods, according to Morningstar. As you might imagine, its 0.29% annual expense ratio is tiny compared with the category's 1.78% average annual expense ratio.