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ETF Specialist

Foreign Stocks' Lost Decade

They have suffered 10 years of poor earnings growth.

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From the nadir of the financial crisis up to the early days of the coronavirus pandemic, foreign stocks failed to keep pace with U.S. stocks. And the gap in their postcrisis performance was wide. Between April 2009 and December 2019, the MSCI USA Index trounced the MSCI ACWI ex USA Index by about 7 percentage points annually.

There are a number of factors explaining this divergence. Technology stocks have been among the best performers of the past decade and represent a larger share of the U.S. market than foreign markets. Also, an appreciating U.S. dollar hurt foreign stocks' dollar-denominated returns.

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Daniel Sotiroff does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.