But in the same period, the euro fell 10 percent. Your fund would show a 10 percent loss, because its holdings are valued in U.S. dollars. Like their U.S. cousins, they were heavily invested in tech stocks. First, the U.S. economy is slowing, which could mean a further rise in the euro. A rising euro would boost profits for U.S. investors in European stocks.
Currencies are dreadfully hard to predict.
But you can make a case for a stronger euro simply because of money flows. Throughout most of the 1990s, foreign money flowed to the United States because interest rates on bank deposits here were higher and stock markets were more attractive. The dramatic fall in tech stocks is adding to the U.S. economy's woes. But even though some mutual funds loaded up on them, Europe's economy isn't as heavily salted with tech stocks as the U.S. economy is. Traditionally, Europe gets the plague when the United States sneezes.