A third approach one should consider is investing in large, multinational firms active in the region. For example, in the telecom sector, Deutsche Telecom (DTEGY-ADR on the NYSE) owns 100 percent of PTC/T-Mobile Poland, Poland's largest mobile operation with 29.6 percent market share; 60 percent of Czech T-Mobile, the largest mobile phone provider in the Czech Republic; and 59 percent of Hungarian Telecom, the largest mobile carrier in Hungary.
(Read More: The 'Miracles' of Hungary and Poland: European Tigers)
In the energy sector, as in the U.S., Europe is catching "gas shale" fever. Poland is believed to have one of the largest European shale deposits. New technologies like hydraulic fracturing will be key to recovery. According to Ernst & Young, most of the shale gas resides in the Baltic Sea Basin and the Lublin Basin. Currently, Poland is a net importer of gas—principally from Russia. These domestic unconventional sources could produce an exceptional economic opportunity for Poland. Joining the Polish company, Orlen (ADRs were just discontinued at the end of 2012), are Exxon Mobil, Chevron, Marathon which have assembled concessions. Others active in the area are Poland's natural gas utility PGNIG, 3 Legs Resources (on London's AIM Market "3 Leg," a subsidiary of Lane Energy Poland) and Canada's Talisman Energy.
Of these three approaches, combining the identification of select local CEE ADRs and the ADRs or traded securities of large multinational companies active in the region will help structure a diversified portfolio representative of the CEE economies. And this combination approach will avoid the costs of the funds and the unattractive overweight to Russia. As in all investment endeavors, ensure you have the right temperament for emerging-market risk and perform your due diligence.
—J. French Hill is founder and chief executive officer of private banking company Delta Trust & Banking Corp. (www.delta-trust.com). He served as Deputy Assistant Secretary of the U.S. Treasury from 1989 to 1991; subsequently, he served on President Bush's White House staff as Special Assistant to the President for Economic Policy. This is the second of two CNBC columns by French Hill about Eastern Europe's success.