The favourite theme was: Asia is still in crisis - avoid; the United States has reached unsustainable heights - lighten; Europe is emerging as the strong economy of the world - load up.

The main embellishments were the euro, and the convergence it would bring, and the coming re-structuring and re-engineering of industry.

New corporate values were supposed to do for Europe what they had done for the US - build a benign environment of low inflationary growth through improved productivity and synergy.

The macro-market statistics looked good. Euroland had 23 per cent of the world's gross domestic product, but only 16.5 per cent of global stock-market capitalisation.

Its stock markets were undervalued with total market capitalisation of only 48.5 per cent of GDP.

In the ballooning US, the ratio was 118.1 per cent, in moribund Japan 56.8 per cent, and in crisis-ridden Asia it was still a hefty 46.5 per cent.

Add in strong economic growth, low interest rates and low inflation, and the glowing picture was complete.

Since then the picture has blurred.

About a third of the 1,500- odd funds authorised by the Securities and Futures Commission for sale in Hong Kong ended the first six months of the year in negative territory. Of those about 100 were Europe-based funds.

Only a handful of funds - from Invesco, Jardine Fleming, Henderson and Dresdner - gained more than 10 per cent in the first six months, according to Standard & Poor's Micropal.

Before holders of those Asian funds which have soared by more than 100 per cent this year start smirking, remember that 10 per cent appreciation in six months is no mean performance in the real world of long-term unit-trust investing.

Twenty per cent a year from a solid economic grouping, where minority shareholders are held in respect, and earnings and corporations are transparent - more or less - allows some sound sleep.

Even so, there are a lot of losers in Europe so far this year, and they want to know why, and where next? One of the drags on many of the funds authorised in Hong Kong has been the currency factor.

Far from being the next muscle currency which some predicted, the euro has steadily deflated since January.

It is now down more than 10 per cent against the US dollar, and the ignominy of parity is predicted by some.

If that parity level is reached, warn some analysts, then the next stop is anyone's guess.

To some observers, the weakness of the euro is nothing to cry about.

Rather, say pro-Euroland economists, it is part of a number of benign factors which could improve Europe's performance.

A weak currency is making European goods more attractive just as the reviving Asian markets are combining with America's continued surge to increase global demand.

Add in lower interest rates, and the revival is on the way, say the enthusiasts.

The second-quarter statistics might not be so good, but Europe's third quarter is likely to be surprisingly strong, according to many economists.

Others warn that the previous slowdown has yet to be reflected in corporate earnings and these could be a drag on the markets.

Then there is always the concern that America's high-altitude balloon will prove to be a bubble - but if that happens, it won't just be European markets that are caught in the draught.

Given Europe's strengthening fundamentals and long-term stability relative to the still fragile Asian economies, investors looking to go bottom fishing might well consider Euroland's ponds.

For those who don't like too much excitement, another advantage is that top-performing European funds over three years show about half the volatility of the best performing Asian funds.

It isn't the volatility of the funds that investors should worry about - but the short-term effects of the next move for the euro.

Ray Heath is pleased to receive general queries about investing in funds, but cannot offer investment advice or recommendations.