China was the focus of the world's best-performing mutual funds last year, with five China funds leading the 1,506 stock funds with at least US$1 billion in assets, Bloomberg reported. Funds targeting Japan posted 10 of the 20 worst returns. JP Morgan's JF China Fund finished 2006 highest, as its assets doubled in value to reach US$3.2 billion. It was followed by the Baring Hong Kong China Fund, which posted returns of 95% in reaching US$2.7 billion. However, the mutual funds made their money by investing in just a few stocks. The largest 10 holdings in the Baring fund accounted for 40% of the fund total, while over half of the JP Morgan fund's assets were in top 10 stocks. A similar strategy is expected in 2007, with banking, insurance and real estate the primary focus.