The tremendous popularity of international and emerging market funds continues this year at levels never before seen, with $71.2 billion being invested in international funds through the first three quarters of the year, Financial Times reports. This beats the previous record for international funds, when they took in $66.7 billion in all of 2004.

By comparision, in the first nine months of this year, U.S. domestic funds took in $27.2 billion, a mere one-third of what they took in during the first nine months of 2004.

It would seem this indicates that American investors' confidence in non-U.S. companies has increased, while at the same time their confidence in domestic companies has waned.

Over the past 20 years, U.S. funds have traditionally taken in three times the amount of foreign funds, and there was only one occasion when net flows to foreign funds surpassed those of domestic funds, and that was in 1990, when they took in $700 million.

Experts are divided on the topic. While some claim that this is a disturbing sign of the distrust the retail customers have in the U.S. stock market, which has underperformed strong corporate earnings this year, others say that the figures are not an appropriate indicator, since it is customary for investors to chase performance.

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