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Fund Spy

Great Funds With Eurozone Exposure

These funds will be impacted by the euro's gyrations, for better or for worse.

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Europe has dominated the economic headlines lately, overshadowing evidence of a solid recovery in the United States. As Greece tottered on the edge of insolvency, Europe's stock and bond markets fell due to fears that Greece's problems would spread, potentially decimating the euro and putting the brakes on the continent's fragile economic rebound. But Europe's markets bounced back strongly on May 10, after the European Union and the International Monetary Fund announced a massive bailout plan to support the euro and prevent an economic meltdown.

It's natural for mutual fund investors to wonder how all this market zigzagging will affect them. The European bailout plan has eased the most immediate fears, but there's still plenty of uncertainty, as Morningstar's Jeremy Glaser pointed out in this video report. It might be tempting for contrarians to go bargain-hunting in Europe amid all this uncertainty, but taking advantage of the turmoil is far from easy for fund investors, as Gregg Wolper recent explained.

Back in February, when the Greek debt crisis was coming to a boil, we looked at bond funds with the most exposure to Greece and other financially shaky nations that use the euro. Now we've examined the question from a slightly different angle, ranking stock funds by their combined exposure to the 12 biggest eurozone countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Slovakia, and Spain. (Note that the United Kingdom and Switzerland, home to some of the biggest companies in Europe, are not part of the eurozone and thus not included here.) Not surprisingly, the top funds on that list are mostly in the European stock category, led by ING Dow Jones Euro STOXX 50 Index (IDJIX), which is specifically limited to stocks from eurozone nations.

David Kathman does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.