As China and its fellow Bric economies of Brazil, Russia and India grapple with soaring inflation, managers are promoting Mena — Middle East and North Africa — funds to adventurous investors.

In Russia, inflation is running at 15%, according to JP Morgan, the investment bank. Stock markets have sold off accordingly: the Chinese market is down 38% for sterling investors this year. In contrast, inflation in Israel stands at 4.8% and in Morocco at 5.5%.

Against that backdrop, Baring Asset Management has launched a fund focused on the oil-rich Mena regions, while rival Schroders has been strengthening its Mena team in preparation for an influx of cash.

Swiss wealth manager Julius Baer has jumped on the bandwagon with a North Africa fund offering exposure to economies such as Egypt, Morocco and Nigeria.

The MSCI Emerging Markets Bric index is up 7.5% for sterling investors over the past year, while the MSCI Arabian excluding Saudi Arabia index has risen far more — giving total returns of 23.6% — Bloomberg figures show.

In Britain the FTSE All-Share index is down almost 13% on the year, while the S&P 500 in America has dropped 8.6%.

Many of the North African countries to which Mena funds offer exposure have enjoyed stellar economic growth. Morocco has notched up economic growth of 8% in the past year, Egypt 7% and Tunisia 6%.

Alexander Shalash, head of emerging-market equities at Julius Baer, said: “North Africa has ‘come of age’. Local industries are developing thanks to inward investment and there’s more confidence due to economic reforms, a better banking climate and a growing credit sector.”

GDP growth in the Middle East is expected to run at an average 7.5% between now and 2012. However, economic growth does not necessarily translate into a bull stock market, and returns can be volatile.

The Egyptian market surged 51.5% between August last year and the end of April, but then tumbled 20.3%, BDO Stoy Hayward Investment Management said.

Oliver Bell, of investment house Pictet’s Mena fund, said: “Egypt remains a worry, although clear value opportunities are appearing and some of the froth appears to be coming out of the more expensive regional markets and stocks.”

Other countries that have performed better include Dubai and Kuwait. Their stock markets have soared 32.6% and 30.3% respectively in the past 12 months.

Kristian Overend, at stockbroker Killik & Co, said: “The economies of the GCC (Gulf Co-operation Council) countries — the UAE, Saudi Arabia, Qatar, Kuwait, Bahrain and Oman — will continue to benefit from strong cyclical and structural forces.”

Yet, despite the optimism, Mena countries remain plagued by political instability. “Problems are building up between Iran and Israel and if they boil over the entire GCC will be caught up in the conflict and suffer because of it, ” said Sami Alfaraj, Kuwait’s national security adviser.

Similar concerns have dogged the Bric economies, not least Russia. The aftershocks of the crisis in Georgia rumble on.

Devan Kaloo, at Aberdeen Asset Management, expressed concerns about corporate governance, financial disclosure and the growing role of the state in Russia’s private sector. “Although some Russian companies may appear cheap, the operating environment is unpredictable and the risks can be significant,” Kaloo said.

Investing in Mena is also not for the faint-hearted, partly due to the infancy of such markets. Dubai’s general index, for example, only has 29 stocks.

The listed market capitalisation in the Mena region has risen rapidly. Egypt’s market capitalisation more than doubled to $160.6 billion (£87.4 billion) in the six months to March, while the overall market cap of the Mena region has soared 500% in the past five years, Pictet Asset Management said.

However, at about $1 trillion, it is still less than half that of the FTSE 100 index.

Stuart Clark, at BDO Stoy Hayward, said: “There’s huge potential for this region as it matures. But there’s considerably more risk from inflationary pressures, liquidity, transparency and intervention.”

The largest two holdings in Aberdeen’s Emerging Markets fund are Brazil, at 14.6%, and India, at 12.2%, but it also has 3% in Israel. It is up 0.71% in the past year and 28.9% over five years.

The manager’s Emerging Markets Smaller Companies fund has 17.3% in Brazil and 12.5% in China and Hong Kong, and less exposure — at 1.7% each — to Qatar and Egypt. It is down 10.5% in the past year, but up 2.36% since its launch in March last year.