Buy European banks: Top fund manager

For those with the stomach for risk, the best return in the world may come from the troubled euro region because credit risk has bottomed and the region's recovery is for real, according to Morningstar's international fund manager of the decade.

"If you look at our portfolio, we're most overweight Europe and within that, European financials," said David Herro, manager of the $21 billion Oakmark International Fund (OAKIX), which is the top performing in its category this year, according to Morningstar. "The European recovery has legs and this is the best way to play it."

Herro has recently purchased shares of Credit Suisse, Italy-based Intesa Sanpaolo, BNP Paribas, Lloyds and Allianz.

The euro zone just barely crawled its way out of a recession last quarter, eking out a 0.3 percent rise in gross domestic product. Still, that number beat economists' expectations and also ended a six-quarter slide for the economy.

(Read more: Correction could top 5 percent: Byron Wien)

"They still have to take steps to repair their microeconomy," said the fund manager. "But if you look at the various components of Europe, we're starting to see improvement." He pointed to Germany and the U.K. specifically.

His 21-year track record at Oakmark shows he may be worth following.

The Oakmark International Fund returned 26 percent last year. The fund has also torched its benchmark, the MSCI World Index, over the past three, five and 10-year periods.

(Read more: Waiting for the 'tapernado' to hit)

In 2010, his performance was recognized by Morningstar and he was named that research firm's best global stock picker of the previous 10 years.

Many of the European banks have started to go Herro's way this summer. Credit Suisse, which trades as an ADR on the NYSE, is up 12 percent over the past two months alone.

Credit Suisse gives "gives you an annuity-like cash flow stream," he said. "And it sells at an extremely attractive valuation—basically under 10 times normalized earnings."

(Read more: Buybacks top dividends: Bill Nygren)

The second-largest bank in Switzerland also sells at a price-to-book ratio, which Herro uses to evaluate financials, near 1.

Brazil could be the next place to put your money for big returns, according to this globe-trotting manager. Just not yet.

"People are turning more bearish" on Brazil, said Herro. "Hopefully with some more market weakness, a few investment ideas may open up."

—By CNBC's Katie Young. Follow her on Twitter: @katiecnbc.