From the August 2007 issue of Entrepreneur

Many European and Mediterranean businesses and economies are booming. One particularly hot sector is financials. Christopher Alderson, lead portfolio manager of the T. Rowe Price Emerging Europe & Mediterranean Fund (TREMX), reports that since the fund's inception in 2000, nearly 40 percent of the assets have been in various financial stocks.

Thanks to rising incomes and consumer spending as well as relatively strong GDP growth in the area, banks aren't the only investments Alderson finds attractive. Energy, consumer staples and telecommunication services also appeal to this fund, which keeps about 52 stocks in its portfolio. In terms of country exposure, as of May, 53 percent of the fund's assets were in Russia, 17 percent were in Egypt, and 11 percent were in Turkey.

This five-star Morningstar-rated fund was up 4.16 percent this year as of May 31. It had its worst year in 2001, when it was down 7.67 percent, and its best year in 2003, when it was up 69.22 percent. "This fund is not for those looking for exceptional short-term gains or who cannot afford to see sudden losses in their account value," Alderson says. "It's for those who want to take a small stake in the region as part of a larger diversified portfolio and are willing to ride through substantial volatility from time to time."

Dian Vujovich is an author, syndicated columnist and publisher of fund investing site fundfreebies.com.