Despite extended periods of disappointing returns and the stigma of significantly higher expenses than their State-side counterparts, foreign equity and emerging market funds are not without hope when it comes to luring new investors. And one of the ways they are gaining favor is by steadfastly laboring to lower fees.

International funds represent a significant niche in the market, with about $158 billion in total net assets. As a category, expenses average 1.72%, while emerging market funds cost an average 2.14%, according to Lipper.

Martin Schulz, director of international equity investments for National City Investment Management Co., advisor to the Armada Funds, said that the higher costs often come from greater expenses incurred by the fund companies when completing very basic portfolio-management tasks, such as executing trades.

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