International Mutual funds posting the best performance over trailing year

foreign stocksWith company 401k plans (or savings investment plans) , you are forced to select from those options your company has selected for you, typically from around 15-20 or so plans. When looking back at my portfolio through Vanguard over the past year (and don’t take past year performance as indicator of the future – rather as way to gauge what may transpire in the future, because typically – it goes the other way) I have found that my international stocks have made massive gains. Now, some may argue this is in part due to how hard they fell, which maybe true, however, they did gain in some cases twice as much as their domestic peers.

Two of the international funds that have performed exceptionally well of which I am highlighting today and offered through Vanguard are (there are many other international stocks that have done well, but these are only a couple offered through my company plan):

  • International Stock Funds Vanguard International Growth Inv.
  • Vanguard Total Int’l Stock Index

The International Stock Funds Vanguard International Growth Inv. ( Redemption Fee: 2% if held < 2 mos) ticker (VWIGX) has posted phenomenal gains over the past 12 months of 50.42%.

  • Invests in stocks of non-U.S. companies with above-average growth potential.
  • Covers both well-established and still-developing markets.
  • Has high potential to help your money grow, but also high risk; share value may swing up and down more than that of U.S. stock funds.
  • Fund managers pick investments to try and outperform market returns, which adds an element of risk.
  • Appropriate for diversifying a portfolio of U.S. stocks.

The Vanguard Total Int’l Stock Index (Redemption Fee: 2% if held < 2 mos) ticker VGTSX has posted 45.64% gains over the last 12 months.

  • Provides exposure to European, Pacific, and emerging market regions.
  • Has high potential for growth, but also high risk; share value may swing up and down more than U.S. stock funds.
  • Appropriate as an investment to further diversify the risks of U.S. stocks.
  • Only appropriate for long-term goals.

So, why have these international stocks done so well you’re asking? Well, there is no clear cut answer it seems to anything in life. Many would attribute their success to people putting money back into the risky sectors as money starts to pour back into the stock market. In essence, when the market began selling, it removed itself from the riskiest investments, thus tremendously undervaluing the stocks of those companies. Those who stuck with the risky investments were rewarded handsomely when the capital flowed back into the market. Also, as equities became cheaper in the US, foreign investors have pumped money into the US stock market, helping escalate the stock prices.


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