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Byline: MURRAY COLEMAN
International stock fund managers lost considerable ground to their U.S. rivals during the second quarter.
The average world stock fund returned -2.43%, according to Lipper's preliminary figures. The average U.S. diversified stock fund gained 0.84%.
That reverses a 12-month trend. Foreign funds returned 29.76% since the end of June 2003. U.S.-based funds were up 21.73%.
"It's a big turnaround," said David Cooley, head of Armada's team that runs $450 million in international assets.
Emerging markets funds returned -9.52% in the second quarter. "Developing markets tend to have fewer valued-added types of goods," said Cooley. "So in the food chain, they don't have as much negotiating power if the world economy isn't running hot."
The MSCI U.S. Prime Market 750 Index dropped 3.82% between March 31 and May 17. That index tracks total returns of the 750 biggest U.S. firms by market cap. The MSCI All-Country World Ex-USA Index fell even more. It returned -8.79%.