Some time ago we wrote about hot mutual funds. If you have been around the financial world for a while, you must have heard about the emerging economies in East Europe. The mutual funds in the new EU members Bulgaria and Romania achieved great returns – some of them close of above 100% per year.
In the Autumn, when I asked the email subscribers to pay some attention to these funds, there was a nice increase of the prices. However quickly after that in November and December in most East European stock exchanges there was a significant correction leading to most funds losing 10% – 20% of their value. The fund prices have not moved much since then.
While I always believe low market is good time to buy, this correction was a good alarming bell that the East Europe mutual funds can’t keep growing all the time. Many experts think that we won’t see anymore 3 digits ROI here and I tend to agree with them.
You can still think about investing in some East Europe mutual funds, but don’t expect wonders. If you are looking for more aggressive options, see what the emerging markets in Latin America and Asia (India, China) can offer you.
Don’t forget that 50% ROI per year with mutual funds is more than great and rare sustainable long term.