(MONEY Magazine) – Lured by spectacular gains in markets such as Russia (up 105% in the first eight months of this year), Hungary (86%), Poland (77%) and the Czech Republic (26%), several new mutual funds have sprung up to hunt for profits in Eastern Europe. Moreover, a few diversified emerging markets funds have boosted their Eastern European stakes. International investment experts warn that you ought to approach these markets cautiously. "Long term, Eastern European markets should continue to be top performers," says Leila Heckman, managing director of Smith Barney's Global Asset Allocation group. "But watch out--they will be highly volatile." Indeed, concerns about president Boris Yeltsin's health and general political instability have sent the Russian market tumbling 17.5% since its July 4 high. Thus pros suggest you limit Eastern European holdings to 5% or so of your equity assets--and avoid single-country funds entirely. No-Load Fund Investor editor Sheldon Jacobs recommends $51 million Vontobel Eastern European Equity (no load; minimum initial investment: $1,000; 800-527-9500), which is up 44% this year. Zurich-based manager Arpad Pongracz, 38, has 42% of assets in Poland, 27% in Hungary and 10% in Russia. For those who prefer greater diversification, Jacobs likes $61 million Robertson Stephens Developing Countries (no load; $5,000 minimum; 800-766-3863). Manager Michael Hoffman, 33, has 35% of assets in Eastern Europe, with another 30% in Asia and 23% in Latin America.

--Chicago-based Acorn Investment Trust has opened a new fund, Acorn USA (no load; $1,000 minimum; 800-922-6769). The fund will follow Acorn's successful strategy of buying small and mid-size niche companies likely to benefit from emerging economic themes. But unlike the original Acorn Fund, Acorn USA will hold only domestic equities. Lead manager Robert Mohn, 35, will be aided by Acorn's renowned Ralph Wanger and others from the firm.

--Daniel Fuss, the talented manager of Loomis Sayles Bond Fund--which has beaten 99% of its peers over the past three years--has just launched Loomis Sayles High Yield Fund (no load; $2,500 minimum; 800-633-3330). Junk bonds have historically been cheaper in autumn, but this year, the junk market has rallied. "High yield is overpriced right now," Fuss says bluntly, "but the fund is still small, so we can buy bits and pieces and find good values."

--Kevin Risen, 35, an analyst at Neuberger & Berman for the past four years, has been promoted to co-manager of the firm's flagship fund, $6.4 billion Guardian (no load; $1,000 minimum; 800-877-9700). He joins veterans Kent Simons, 60, and Larry Marx, 50, at the helm. While the fund has lagged the market badly in the past 12 months, gaining just 7.6% vs. the S&P's 20.8%, analysts say Risen's elevation is not a sign of panic. "With its contrarian approach of jumping into controversial sectors and sticking with them, it's only natural the fund will lag the market at times," says Larry Chin, associate editor at the No-Load Fund Analyst.

--Mark Bautz and Jason Zweig