Emerging markets have been white hot. T. Rowe Emerging Markets Stock (symbol PRMSX) has been even hotter. The fund vaulted a blistering 65% over the past year through July 19, seven percentage points better than its bogey.

It's hard to find fault with this fund. Steered by London-based Chris Alderson, the lead manager, Emerging Markets is nicely balanced, with nearly equal weights in companies in Brazil, China, South Korea, Taiwan and India. His sector bets in financials, domestic consumer stocks and infrastructure plays have all borne fruit. The fund's turnover is low by emerging-markets standards, and annual fees (1.25%) are reasonable.

The main catch is emerging markets themselves. Long term, this is where the action is, and already the developing world is generating more than half of global economic expansion each year. But these markets are due for a breather, which will come if investors lose their appetite for investing in relatively risky assets. Remember also that your exposure to emerging market economies -- direct and indirect, as through oil and commodity companies -- is on the rise in diversified international stock funds, not to mention some domestic stock funds. Come to think of it, how much U.S. companies continue to thrive rides on the growing prosperity in places like China, India and Brazil.

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