http://news.yahoo.com/news?tmpl=story&u=/latimests/20041220/ts_latimes/shifttoforeignstockssappingthedollar<snippit>
Already depressed by the nation's huge budget and trade deficits, the U.S. dollar is being undermined by American mutual fund investors: More of them are funneling money into foreign stock funds, a shift that hurts the greenback.
Thanks in large part to the dollar's weakness, returns on foreign shares overall have significantly outpaced U.S. market returns since 2002. Foreign stock mutual funds have gained 12% a year, on average, over the last three years, compared with a 4.9% average annual gain for domestic stock funds, according to Morningstar Inc.
That performance edge is proving a big draw for American investors this year.
Net U.S. cash inflows to stock funds that invest overseas soared to a record $79.7 billion in the first 10 months, compared with $47.6 billion for all of 2003, according to estimates from fund tracker Financial Research Corp. in Boston.
A list of the 25 best-selling stock and bond mutual funds of 2004 includes five that primarily invest in foreign securities, Financial Research data show. By contrast, the 25 best-selling funds at this point last year all were domestic portfolios.
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