At best, stocks of some of the biggest American companies can't elicit more than stifled yawns from individual U.S. investors this year.
If people have cash to put to work in equities, they'd rather have something from a far-off shore — say, Chinese telecom giant China Mobile, Russian natural gas titan Gazprom or South Korea's Samsung Electronics Co.
All three of those companies are among the largest stockholdings of the Vanguard Emerging Markets exchange-traded fund, which in July raked in $2.2billion in fresh cash from investors, boosting total assets to $29.3 billion.
That made it the most popular mutual fund of all for the month, exceeding even the cash intake of bond-fund behemoth Pimco Total Return.
It's hard to separate hot-money players from buy-and-hold investors in the funds, but the Vanguard portfolio's chart-topping appeal helps illustrate Americans' bifurcated view of equities these days: They want less and less to do with domestic stocks, yet they're happy to hold on to foreign shares or to raise their stakes in those issues.
Many professional investment advisors have been feeding that trend over the last few years by ratcheting-up clients' overseas stock holdings at the expense of their U.S. holdings. Some advisors now keep at least 50% of their clients' total equity investment in foreign issues.
Just a decade ago having 25% of your stock portfolio in foreign shares was considered the upper limit.
At this point everyone knows the conventional wisdom about foreign markets, which is that you have to be there in a big way because that's where the fastest economic growth is likely to be — not in the U.S.
Another lure is that owning assets denominated in foreign currencies should help protect your purchasing power if the dollar's value wastes away. That was a major factor in foreign markets' hot performance from 2003 through 2007.
Conveniently, the argument for investing more overseas also fits with America's grim self-appraisal amid the devastated housing market, sky-high unemployment and record federal borrowing. If you believe that the country's problems are overwhelming, it's easy to imagine that things must be better almost anywhere else.
Giles Almond, head of Matrix Wealth Advisors in Charlotte, N.C., says he has been stunned this year by the number of clients who've asked him about the merits of moving to Costa Rica, or how they'd go about getting their assets out of the U.S. altogether.
"You could look at it as a contrarian indicator," Almond says: Extremely negative sentiment about any market often means that's a good place to look for bargains.
Yet mutual fund investors have continued to chisel away at their domestic equity holdings in favor of sending cash abroad. Domestic stock funds suffered a net outflow of $29.5 billion in the first seven months of this year while foreign funds took in $28.1 billion in new money in that same period, according to the Investment Company Institute.
As they turn their backs on American shares, U.S. investors seem willing to cut foreign markets substantial slack. It was, after all, the European government debt crisis, sparked by Greece's financial woes, that triggered the spring rout in markets worldwide. Yet domestic funds still bore the brunt of the selling in that slide.
Reality check: Investors who own the most popular foreign stock funds may not be aware of just how heavily skewed their fund assets are to European and Japanese shares, rather than to sexier emerging-market issues. The biggest funds tend to own the biggest stocks, and those issues are in developed markets.
Norm Boone, a principal at Mosaic Financial Partners in San Francisco, figures many people naturally focus less on the day-to-day economic news from abroad while hanging on every negative headline about the domestic economy.
"What you don't know doesn't scare you as much as what you do know," he says.
Investors' push into foreign equities also has momentum going for it. The tide turned in favor of overseas shares in 2005 and hasn't let up. Nobody wants to leave a good party.
The late-1990s and early-2000s were dismal stretches for many foreign markets. Asia suffered a major financial crisis in 1997, Russia defaulted on its debt in 1998 and a surging dollar from 1995 to 2002 slashed the returns U.S. investors earned on overseas securities.
But all of that was the perfect set-up for a rebound in depressed foreign stocks beginning in 2003. What's more, the Chinese economy's ascendance began to provide a huge lift to many other emerging-market economies by stoking robust demand for their raw materials. And the dollar started to slide, automatically enhancing returns on foreign securities.