David Gaffen observes that "the past 12 months presented a good time to buy a passport for your portfolio." Via his WSJ blog MarketBeat, here are Global Returns for 2006:
As good as the returns were in the U.S., they didn't hold a candle to emerging markets and overseas returns. The table shows the strength of overseas markets, from BRICs to France to U.K.
The big inflows had some strategists (not us!) thinking investors moved into the emerging markets at exactly the wrong time: World equity funds had inflows of $104.61 billion in 2005, compared with $31.19 billion for domestic equity funds [ICI].
The 1st four months of 2006 were the biggest for domestic inflows -- at least $18.32 billion per.
Since then, a curious stat developed: a majority of fund managers polled by Merrill Lynch believe global stocks will be higher in a year’s time, and the greatest number thinks that if one market is overvalued, it’s the U.S. market.
Are emerging markets maturing? Or is this merely a testament to the global glut of liquidity?