International-stock mutual funds made double-digit gains in 2010 but still trailed their U.S. counterparts, the Wall street Journal reports.

Diversified international-stock mutual funds reportedly gained 13.3 percent on average last year through Dec. 30, according to data from Morningstar. But those returns paled in comparison to U.S. stock funds, which gained 18.9 percent for the year.

"International did lag the U.S., but any time you can make 10% to 20% in a year, I think that's pretty good," Sam Stewart, chairman of Salt Lake City-based Wasatch Funds [see profile], told the pub.

The biggest surprise for fundsters was Japanese stock funds' strong performance of 11.2 percent for the year. Developed markets funds in general gained favor among fund managers over emerging markets in 2010 and several fundsters are reportedly reallocating from emerging markets to Europe because of prices.

"Simply from a valuation perspective, emerging markets are pricier than other markets," Ed Lugo, manager of Franklin International Small Cap Growth Fund [see profile], told the pub. 

Edited by: Hung Tran


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