Foreign stock funds outperformed U.S. stock funds in
The average world equity funds racked up a 2.85% gain last
month, their best monthly score since January's 3.65%. It easily
topped the scant 0.78% gain on average by U.S. diversified stock
funds, according to Lipper Inc.
Japan-focused funds led the foreign surge, soaring 8.35%.
India regional funds tacked on 5.02% last month. Pacific
regional funds grew 4.70%. European stock funds expanded
Part of the world-stock fund push was due to a rebound. "Some
non-U.S. areas were simply catching up in April," said Bob Doll,
chief equity strategist for Nuveen Asset Management. "Most lagged
the U.S. in the first quarter ."
World stock funds gained 3.81% on average in Q1 vs. 10.16% for
U.S. diversified stock funds.
For Japan funds, April was a continuation of Q1, when they
scored a 12.75% gain.
Their huge April rise stemmed from investor approval of policy
steps by Shinzo Abe, who was elected prime minister in
"It is optimism that they're going down a path that's kind of
similar to the path the U.S. used to push down rates, push people
out on the yield curve and try to stimulate growth," said Joe
Milano, manager of $4 billion T. Rowe Price New America Growth
Fund . "It is Japan's version of quantitative easing."
Abe appointed Haruhiko Kuroda as governor of the Bank of
Japan, with a mandate to spark reflation by printing money.
Abe also has pushed for exports of Japanese infrastructure
products, such as nuclear power plants to the United Arab
European stock fund strength reflected investor comfort with
how the eurozone's strong economies handled their ongoing debt
The banking blowup in Cyprus made headlines. But many
investors' eyes were glued to GDP numbers.
Signs pointed to a slowdown in Germany's economy. Spain, the
eurozone's fourth-largest economy, late in April reported a
seventh consecutive quarter of recession.
"Investors believe the European Central Bank will do whatever
it takes to support peripheral hardship economies," said Ron
Sloan, chief investment officer of Invesco's U.S. core equity
team and senior manager of $5.7 billion Invesco Charter Fund
Sloan had 19% of his money at work in European stocks as of
Dec. 31. He holdsABB , which makes power and utility equipment.
The Swiss firm operates globally.
"We like ABB for its portfolio of businesses," he said. "They
have leading shares in plant automation equipment, electronic
equipment sold into a variety of nonresidential construction
markets and transformers and electronic equipment sold into the
utility and power generation markets. This exposure will allow
ABB to participate in the necessary cap-ex spending that will
occur in these markets worldwide over the next few years."