Funds Flow to Non-U.S. Focused Funds
Sunday, January 10th, 2010
Richard Shaw (QVM Group) submits:
The lead article in Barron’s this week said, “After getting comfortable overseas, U.S. investors may find it tough to come back”. They pointed to the recent outflows from US oriented funds and the inflows to non-US oriented funds, with an emphasis on emerging markets.
Let us add some additional history to that story. We have been tracking monthly net flows to US focused equity funds and to non-US and world equity funds since 2002. Over that time mutual funds in the US (still a far larger asset pool that ETFs) had a net inflow of new money in the amount of $445 billion, of which 93.23% was to non-US and world equity funds. Less than 7% was net to US focused funds. Investors favored non-US funds with about $13 for every $1 to US funds.
