Performance and risk exposure of international mutual funds

This study examined whether internationally diversified mutual funds increase a U.S. investor 's risk-adjusted return above that on a domestic benchmark mutualfund. Average returns on about one-half of the international funds exceeded the domestic benchmark fund's return. The risk-adjusted returns on the international mutual funds were not significantly different from that on the domestic benchmark fund. These results differ from earlier studies which generally found superior returns on international mutual funds. The benefits for the U.S. investor of holding an internationally diversified mutual fund appear to be limited for the period studied.