(FORTUNE Magazine) – FOREIGN TRAVEL may broaden your outlook, but foreign investing can fatten your wallet. Consider some of the returns from abroad so far this year: The Turkish stock market more than doubled; Finland's and Indonesia's shot up more than 50%. Even mature markets roared: Japan handed 47% to investors who count their returns in dollars; Germany dished out 26%. Compare that kind of performance with 5% for America's S&P 500 index and 7% for the Dow Jones industrial average.

Foreign markets still involve risks unknown to investors who keep their money home. Before you pour your life savings into Turkish liras, remember that many of these stock exchanges lack the size and liquidity of U.S. markets and can drop as quickly as they rise. While your money would have more than doubled during a sojourn in Turkey this year, you would have lost half of it last year. Beware also the vicissitudes of foreign exchange. A 10% move in the dollar can wipe out in one day gains made over many months. To help guide you to the most promising markets, Fortune talked with investing experts around the world. By drawing on their knowledge of economics, politics, finance, and culture, we've come up with a list of markets they think will be hottest in 1994. Adventurous investors with steely nerves and an appetite for big returns should consider them, listed below in order of market capitalization.

-- FRANCE. Prospective 1994 return: 25% in French francs. Europe's slump hasn't spared France, but if you focus on what many believe to be the main cause of the slowdown -- high interest rates -- you'll see why professional investors are so excited about this market. Because of a recent loosening of Europe's Exchange Rate Mechanism (ERM), which seeks to keep European currencies within fairly narrow ranges relative to one another, interest rates have come down all over Europe and should continue to do so. That will give stock markets a big lift, and France should particularly benefit because of ) the underlying strength of its economy. Says Alan McFarlane, managing director of Global Asset Management in London: ''France presents the most attractive environment for investing in any European market that we've seen in a very long time.'' He cautions, though, that U.S. investors could be hurt by a slight rise in the dollar against the franc, and suggests using funds that hedge currency exposure. Financial services companies such as Cie de Suez and Banque Nationale de Paris will feel the bounce from lower rates first. Like their U.S. counterparts, banks and insurers will profit from the widening spread between short- and long-term interest rates as short rates fall. Many of these stocks have already rallied as much as 30% in 1993, but Peter Chambers, chief investment strategist of James Capel in London, says the financial sector will continue to show strength through much of 1994. Chambers thinks that as lower interest rates stimulate the economy, profits of industrial companies will begin to rise, probably later in the year. Look behind the current recession and high unemployment rate (10%) in France, and you'll find an economy that's quite strong. Inflation, at just under 3%, is tame, growth in retail sales is the highest in Europe, and French companies are leaner than ever. Automaker Peugeot and parts maker Valeo, among others, have cut costs dramatically in the past several years. Both have ADRs that recently traded over the counter for $23 and $36, respectively. The conservative government that came to power last March is about to launch a huge program to reverse the nationalization of major companies that the Socialists brought about in the early 1980s. The government will soon sell large stakes in such companies as chemical and drug producer Rhone-Poulenc and Elf Aquitaine, the petroleum giant. It also plans to privatize Banque Nationale de Paris, among other financial institutions. Will these shares rise? Says David Houston, a fund manager at Global Asset Management in Edinburgh: ''The government wants the privatization program to be a success, so they'll price the first ones attractively.'' Houston suggests that investors keep their eye on two more companies that will probably be privatized later in 1994: Pechiney, a world leader in packaging and aluminum production, which should benefit from a pickup in the price of that commodity as the world economy recovers, and CNP Assurances, a life insurer that serves Europe's fast-growing market of retirees. French savers have built up $1.4 trillion in short-term money market accounts, and many experts assume that some of that money will chase the higher returns that equities offer as short interest rates continue to fall. To buy a diversified basket of French stocks, consider the closed-end France Growth fund, which is managed by a subsidiary of Banque Indosuez and trades at a 6% premium to its net asset value. In France, and elsewhere in Europe, smaller companies are a good way to play the expected economic recovery. Consider what's happening in Britain, which is ahead of its Continental neighbors on the path to growth. After five years of miserable performance, small-company stocks are trouncing larger shares, rising 30% so far this year. Says D. Anthony Robinson, director of investment at Lombard Odier International Portfolio Management, a pension fund manager in London: ''The theme of small-cap stocks will broaden out to Europe. Smaller stocks will be the place to be as the economies recover.'' For a pure play, U.S. investors can purchase the open-end DFA Continental Small Company fund. The closed-end Scudder New Europe fund also holds a large number of small companies.

-- MEXICO. Prospective 1994 return: 20% to 30% in dollars. The on-again, off- again prospects for the North American Free Trade Agreement (NAFTA) kept stock prices down for the first half of 1993. Should NAFTA be approved, Jane Hakham, investment director at Beta Funds in London, expects a ''one-time re- rating of 30%.'' The market's multiple, now around 12, could easily rise to 16, she says. Though U.S. congressional approval of the treaty remains iffy, Richard Watkins, chief executive of Latinvest Securities, a London brokerage firm, thinks a gamble on the market is worth it. He estimates that the potential gain in the Mexican market, should NAFTA pass, is three times as large as the potential loss should the treaty fail. With or without the agreement, the outlook for the country's economic future is bright. Carlos Fritsch, director of research for Latin America at S.G. Warburg Securities in New York, points to promising fundamentals: Mexico's current-account deficit is shrinking, from 6.9% of GDP in 1992 to an estimated 6.4% this year; short-term interest rates have fallen from 19% earlier this year to 13.5% today; and foreign direct investment has come into the country faster than expected. President Carlos Salinas de Gortari wanted to double the amount of investment by the end of his term in December 1994; he's accomplished that a year ahead of schedule. Mexican stocks are selling at bargain prices. Says Michael Bullock, a managing director at Morgan Grenfell Asset Management: ''Mexico is very cheap. You can buy companies that will increase earnings 15% to 20% a year, regardless of NAFTA, for multiples of ten or 15.'' There are many ways for outsiders to enter the market. Telefonos de Mexico, which accounts for 30% of the market's capitalization, remains a core position for most international money managers with Mexican holdings. Right now the phone company's ADRs trade for $50, a mere eight times Fritsch's estimate of 1994 earnings -- that's for a company that is estimated to increase profits an average of 13% to 14% annually for the next five years. Says Watkins: ''Telmex is such a profitable company, and there are still plenty of productivity gains to be made.'' Watkins also recommends Grupo Televisa, the largest media company in Mexico. In addition to the domestic market, the company sells programming to 350 million Spanish speakers worldwide. Two closed-end equity funds, the Emerging Mexico fund and the Mexico fund, trade, respectively, at discounts to net asset value of 6% and 17%. Both have returned over 35% in the past 12 months.

-- SOUTH KOREA. Prospective 1994 return: 30% in dollars. What do you call annual economic growth of 4%? If you're in South Korea, which has been used to decades of near 10% growth, try recession. When the overheated economy cooled down, the Korean stock market fell off a cliff. While other Asian markets regularly turned in 20% annual gains, Korea has been grappling with a three- year bear that cut its market's value in half. Says John D. Bolsover, chief executive of Baring Asset Management in London: ''Korea stands out like a sore thumb in Asia.'' The market recovered from its bottom in 1992, but at 695, the Korean Stock Exchange's composite index still stands 31% below its 1989 high. Despite recent strength, the Korean market still looks like a bargain. Price-to-cash-flow and price-to-book ratios of 4.5 and 1.3 make it the cheapest in the region, according to Graham Bamping, director of emerging- market investments at Morgan Grenfell Asset Management. Taiwan, next up on the bargain scale, sells for a price-to-cash-flow ratio of 9.6. And now, says Bamping, the economy is showing signs of picking up again. Annual growth $ should be 7% or more next year. Says he: ''The crucial thing driving the economy is the renewed competitiveness of Korean exporters.'' With unions rapidly driving up wages, Korea Inc. can no longer compete with such low-wage countries as China, Indonesia, and Thailand. To compensate, Korean conglomerates have moved up the technology curve, producing more higher-value products. At the same time, record levels of capital spending are now translating into productivity gains for companies that make electronics, chemicals, and cars. Exporters like Samsung and Hyundai have also benefited from the sharp rise of the Japanese yen against the Korean won, which makes Japanese products much more expensive. As a result, Korean semiconductor exports rose 40% in the first quarter of this year. Exports of cars almost doubled. Bolsover of Baring thinks the market will continue its upward course and break 900 in 1994. ''You've got lots of companies selling for ten to 15 times earnings and growing profits at 25% a year,'' he says. ''You have a bunch of people who make the Japanese look lazy. The country is chock-full of technology, and there's every kind of industry you could want.'' Though it had no diplomatic relations with the People's Republic of China until 1992, South Korea has been trading with China ''like there's no tomorrow,'' in Bolsover's phrase, further fueling economic growth. It is difficult in practice for foreigners to invest directly in the Korean market. But you can buy mutual funds that do. The Korea fund and the Korean Investment fund trade for premiums of 23% and 16%, respectively, to their net asset value. While these premiums seem high, they are not as large as they have been, and the investment prospects for this market make it a risk worth taking.

-- MALAYSIA. Prospective 1994 return: 20% in dollars. Malaysia's 44% gain so far in 1993 places that market among the world's best performers this year. Does that mean you've missed the ride? No, says Richard Foulkes, chief investment officer at Schroder Capital Management International in London. Foulkes is ''extremely bullish'' on the Kuala Lumpur exchange, predicting corporate profit growth of 20% in 1994. Says he: ''There's absolutely no reason that the market shouldn't keep pace.'' Malaysia, says Foulkes, offers ''a safe exciting investment, vs. some of the risky exciting investments that you'll find elsewhere in the region.'' Especially encouraging is the way the government handled an economy that almost got too hot. By quickly tightening monetary policy, Malaysia stifled nascent inflation and a rising trade deficit. Inflation is a low 4%, and domestic economic growth is back to 8% after dipping to 7% earlier this year. Says Foulkes: ''I get a very comfortable feeling putting money into Malaysia -- it's the easy way into Asia.'' The shares of the recently privatized Telekom Malaysia offer investors one proxy for the market. Profits should increase 20% a year, Foulkes predicts, and the share price should keep pace. He is also keen on gambling stocks such as Tanjong and Genting, parent of Resorts World. The companies should benefit from the completion of the new North-South highway, which will give Singaporeans -- who can't gamble at home -- easier access to Malaysian casinos. ''That's a whole new source of demand,'' says Foulkes. Genting trades over the counter as an ADR. The Malaysia fund trades for a 6% premium to its NAV.

-- INDIA. Prospective 1994 return: 30% to 50%. Get all the promise of an emerging market, giant-size, by buying into the world's second most populous country. India has already had a spin in the investing limelight. Early last year enthusiasm over economic liberalization drove the Indian market up 130%. Then in April 1992, a scandal broke the stock market bubble: Over $1 billion of government money had been illegally funneled into the market. The Bombay exchange now stands 45% below its 1992 high. Its price/earnings ratio -- 19 times expected 1994 earnings -- is about average for world markets, and it looks poised for another ride up. Says Arnab K. Banerji, chief investment officer of Foreign & Colonial Emerging Markets in London: ''India is one of the most exciting investment stories in the world.'' The government's commitment to economic reform has fueled this excitement. Average tariffs on imported goods, for example, have been halved in the past two years, and foreign corporations can now own majority stakes in Indian companies. As India's central-planning mentality continues to recede, Banerji expects the economy to grow 6% to 7% a year, three times the rate in Europe or the U.S. The estimated 220 million Indians who make up a rapidly growing middle class will help propel this growth. The country has 50 million technically skilled workers and a million business school graduates. Banerji also points to a recent reversal in flight capital from the large overseas Indian community. More than $2 billion has come back into the country in the past year. Money has been moving in the opposite direction almost continually since independence in 1947. ''The smart money is going back into the economy,'' he says. ''It makes me think something is going on.'' Where will all that money land? India's well-developed stock markets, with over 7,000 companies to choose from, are a good bet. (China, the other fast- growing regional giant, lists fewer than 25 stocks on its fledgling exchanges.) The government would like to capture as much money from outside as possible. After shunning foreign investment for years, officials are seeking it now. This year alone, investment houses launched four new Indian funds in Europe. Says Foreign & Colonial's Sanjit Talukdar, manager of one: ''This injection of capital obviously will push up prices.'' Inflation is down to 6% from 17%, but real interest rates are still hanging high at 10%. Talukdar expects them to fall by two to three percentage points over the next several months as monetary policy continues to ease. Says he: ''The Indian market is set to soar.'' The newly convertible rupee should also hearten international investors. It has held its value since exchange controls were removed earlier this year, so currency depreciation shouldn't eat into your returns. While institutional players can now get licenses to trade directly on the Bombay exchange, small investors have few options other than closed-end funds. The India Growth fund trades in New York for a 27% premium to net asset value, a premium it has carried since the beginning of 1993. Investors wary of such a high premium should watch for the new India Liberalization Fund, managed by Alliance Capital Management and due in mid-October.

Adventurers in India and elsewhere should be ready for all sorts of snakes and other predators as they cut through the jungles of international investing. Political scandals, currency crises, guerrilla insurgencies, ethnic strife -- the possibilities for disaster are plenty. But intrepid investors willing to brave such dicey markets stand to reap the biggest rewards.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: French stocks

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: Mexican stocks Growing opposition in the U.S. to the North American Free Trade Agreement makes investors nervous. But Mexico has a bright future even without NAFTA.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: Korean stocks

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: Malaysian stocks Malaysia's 44% gain so far this year is among the world's best. But don't worry that you've missed the ride. Analysts see no reason it won't keep going another 20% or so next year.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: Indian stocks