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A Mixed Bag for International Funds in 2021

Elation over economic recovery balanced unease about the future.

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The previous year’s momentum carried into early 2021, but non-U.S. equities struggled in the year’s second half due to re-emerging pandemic concerns and rising inflation fears. The Morningstar Global Markets ex US Index rose 8.4% in 2021, though returns flatlined after a 9.3% gain through the first six months. Emerging markets struggled more than their developed counterparts--the Morningstar Emerging Markets Index dropped 0.3% over the year, while the Morningstar Developed Markets ex US Index rose 12.2% over the same period. Most developed-markets sectors did better than those in emerging markets, but healthcare and consumer discretionary stocks fared much better.

Nicholas Goralka does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.