I/ Higher in return on capital available

The rates of return available on non-U.S. securities often have substantially

exceeded those for U.S.-only securities. The higher returns on non-U.S. Equities can be
justified by the higher growth rates for the countries where they are issued. These superior
results typically prevail even when the returns are risk-adjusted

Global Bond-Market Returns: Table 1 reports annual rates of return for several
major international bond markets for 1986–2010. The returns have been converted to U.S.
dollar returns, so the table shows mean annual returns and standard deviations that a U.S.-
based investor would receive. An analysis of the returns in Table 1 indicates that the return
performance of the U.S. bond market ranked sixth out of the six countries. Part of the
reason for the better performance in dollar terms of the non-U.S. markets is that the dollar
generally weakened during this time frame, giving U.S. investors a boost to their foreign
returns. Put another way, U.S. investors who invested in these foreign bonds received the
return on the bonds equal to that of local investors, but also received a return for holding
the foreign currency that appreciated relative to the U.S. dollar.

Table 1 Global government bond annual rates of return un U.S. Dollars: 1986-2010
Geometric mean Arithmetic mean Standard deviation
Canada 9.89 10.32 9.77
France 9.65 10.39 12.86
Germany 8.48 9.28 13.49
Japan 8.20 9.14 14.75
United Kingdom 9.09 9.84 13.28
Unites states 7.20 7.37 6.09
Source: Bank of America-Merrill Lynch