Like a toddler who fell off a swing and clambered back on, the young Chinese market recovered quickly from the tumble. The Shanghai Shenzhen CSI 300 index has posted a string of new highs over the past week and a half and is now 5.3 percent above its Feb. 26 close.

It's the mature U.S. market that's still aching from the fall. The Dow Jones industrial average, which lost a hair-raising 416 points on Feb. 27, is still 250 points or 2 percent below the Feb. 26 close.

Economist Edward Yardeni notes that the Standard & Poor's 500 index gained 1 percent in March, ranking only 25 out of 35 among the global stock markets he monitors.

"There's a sense among investors that if you are looking for sustainable growth, you are more likely to find it in Asia than the U.S. You are maybe even more likely to find it in Europe than the United States," he says.

Chinese investors have few options inside or outside their country. They can get about 2.5 percent a year in a bank account, bond or insurance contract, or they can invest in a fairly limited number of publicly traded Chinese companies. As a result, the market there is highly volatile and casino-like.

Despite strong economic growth, in 2003, 2004 and 2005, the Chinese stock market went down, in part because the government was selling off stakes in Chinese companies, says Richard Gau, manager of the Matthews China Fund.

Although those concerns are subsiding, investors are now focusing on an impending slowdown in corporate earnings growth. Results for the first quarter will be reported over the next few weeks.

"It's not just a one-quarter dip," says S&P equity strategist Alec Young. S&P is predicting that earnings growth for the full year will be just 7 percent compared with 15 percent in 2006.

In 2005 and 2006 and the first two months of 2007, U.S. funds that invest overseas attracted almost three times as much money as those that invest domestically, according to Financial Research Corp.

Based on early information from AMG Data, which tracks fund flows on a weekly basis, domestic funds had net outflows of $536 million in March while international funds had net inflows of $1 billion (excluding exchange-traded funds).

This year, nine funds that invest abroad have closed to new investors and two more -- Templeton Global Smaller Companies and Templeton Foreign Smaller Companies -- will close on April 30, according to Morningstar.

Funds usually close when they take in money faster than they can invest it or when they see a dearth of good investment opportunities. Closed funds generally remain open to existing investors and retirement-plan customers.

Funds with the best track records generally attract the most new assets and are more likely to close. Funds that invest in small companies are generally the first to close because it's harder to invest a large chunk of money in small companies without affecting their stock prices.

"We've done a couple studies showing that funds tend to underperform after they close," says Dan Lefkovitz, a Morningstar senior fund analyst "Fund closings tend to happen more often than not in hot asset classes. Hot asset classes often cool off. It's a sign that it's peaking or near its peak," he says. "Or else the closure comes too late," after performance has started to wane.

When it comes to international funds, "it does appear to be late in the game but it depends on what the game is," Yardeni says. "If it's a fairly cyclical environment, now is the worst time because they have had this superior performance in the last three years. On the other hand, a lot of small investors thought China was finished in late February." Yet after its brief hiccup, that market has continued setting new highs.

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