Thank You for Smoking
Tobacco stocks lit a fire under certain international funds last year.
The past year was even rougher for international funds than it was for those centered on the battered U.S. market. While the S&P 500 ended a tumultuous year ahead by 2.1%, foreign markets weren't so fortunate. Most ended up deep in the red, owing to the more direct impact of the eurozone crisis and worries about slowing growth and rising inflation in emerging markets. The effect of weak foreign currencies, when fund returns were translated into dollars for U.S.-based investors, exacerbated matters.
Across the board, foreign-focused categories suffered much deeper losses than U.S.-focused categories did. For example, the foreign large-blend group lost 14% while the domestic large-blend category dropped just 1.3%, and the diversified emerging-markets category plunged 19.9%, more than any domestic group. (The worst U.S. category was the narrowly focused financials-sector category, with a loss of 15.1%.)
Gregg Wolper does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.