After 10 years of dabbling in the promising but unpredictable emerging European markets, Ghadir Abu Leil-Cooper says she has developed nerves of steel. Even as the benchmark FTSE customised Eastern European Index was plunging 12 per cent in October due to shaky conditions across emerging markets, Ms Cooper was busy buying aggressive stocks, such as Russian oil and gas company Lukoil Oil. 'Volatility does not change the fundamentals of a region,' says Ms Cooper, the manager of the US$1.7 billion Baring Eastern Europe Fund. 'The growth in Eastern Europe is very sustainable and what excites me about this region is that each area, whether it's Central Europe, Russia or Turkey, has its own story'. Ms Cooper grew up in Palestine (she is fluent in Arabic), which she says helps her better understand emerging markets. 'You don't have any prejudices when you look at new markets, if you come from an emerging market yourself. You immediately see their potentials and the pitfalls.' She went to Britain to read Physics at Durham University and eventually obtained a PhD in nuclear physics. Rather than pursue a career in science, she decided to join the financial world, starting with BZW Investments. 'I wanted to use my analytical and linguistic skills, meeting people and companies and making deductions, very similar to what scientist do,' she says. She moved to Baring Asset Management in 1997 and became a part of the global emerging markets equity team, which looks after the emerging Europe, Middle East and Africa regions. A senior investor in the team today, she co-manages a New Russia Fund besides running the Eastern European fund. The Baring Eastern European Fund is 42.4 per cent invested in Russia. It also has 19.1 per cent invested in Hungary, 18.5 per cent in Poland, 9.9 per cent in the Czech Republic, 5.9 per cent in Turkey and the rest in cash. There are several growth themes running across these markets, says Ms Cooper. In Central Europe, where several countries have joined the EU, ongoing convergence is resulting in improving wages and economic expansion and wealth levels are approaching those in Western Europe. Also a lot of investment is flowing into Central Europe from companies in Western European countries, such as Germany, as the workforce is still cheap and there are virtually no barriers, says Ms Cooper. These areas include manufacturing, banking, pensions and insurance. This will stimulate better growth and earnings for Central European companies and create wealth. In Russia the story is very strong, with economic expansion driven by high oil and commodity prices. 'They have very high resources and production of commodities like oil and gas [16 per cent of the world's iron ore and coal reserves are with Russia and almost 40 per cent of the world's total palladium production is done there] and we don't think commodity prices are going to fall off the cliff,' says Ms Cooper. The fund's performance underscores Ms Cooper's beliefs. As of September 30, it returned an impressive 44.5 per cent in the year to date, while exceeding 68 per cent and 258 per cent in returns for the previous one-year and three-year periods, respectively. But its performance was a little short of the benchmark, which showed returns of 46.3 per cent, 71 per cent and 254 per cent respectively in the corresponding periods. 'But compared to the peer group, our performance is much better and we feel that domestic stocks, other than Lukoil, that we invest in will result in strong returns going forward,' she said. 'A converging Central Europe, sustainable competitive advantages and positive earning surprises mean that the investment story in Eastern Europe is far from over.'