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A (Slightly After) Midyear Roundup of International-Stock Funds

Pundits routinely note that Americans tend not to pay much attention to developments in foreign countries. But U.S.-based investors couldn't avoid hearing plenty of international news thus far in 2012. The continuing travails of Europe and the potential consequences of slowing growth in China have dominated the financial headlines for much of this year.

Gregg Wolper 06.08.2012


Pundits routinely note that Americans tend not to pay much attention to developments in foreign countries. But U.S.-based investors couldn't avoid hearing plenty of international news thus far in 2012. The continuing travails of Europe and the potential consequences of slowing growth in China have dominated the financial headlines for much of this year.

With that in mind, when we check in two weeks after midyear, it's noteworthy that the results for internationally focused stock mutual funds have been, though not spectacular, far healthier than one might guess. That doesn't mean macroeconomic concerns are unwarranted. But it does indicate how political, economic, or social developments don't necessarily translate into stock and fund returns, especially in the short term.

Beating Low Expectations
Even if many international funds held up decently well, it might seem that Europe-stock funds, at least, should have imploded. Given the endless rounds of inconclusive crisis-focused summit meetings and financial fears rapidly spreading from small countries to major ones, big losses among funds that can't shift money out of Europe might be taken for granted. However, Europe-focused funds are showing a 3.9% gain this year (through July 13). Knowledgeable readers might wonder if the handful of Russia/East Europe funds in the category is skewing the group's returns upward. But those funds aren't having much influence on the average this year.

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About Author

Gregg Wolper  Gregg Wolper is an editorial director and senior mutual-fund analyst at Morningstar.

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