Mutual fund managers at BlackRock Inc., the Goldman Sachs Group Inc. and Waddell & Reed Financial Inc. are investing everywhere except in the United States.

Dennis Stattman is holding the lowest amount of U.S. and Canadian stocks in his $18.1 billion BlackRock Global Allocation Fund since 1998. Katinka Domotorffy, manager of the $2.3 billion Goldman Sachs Growth Strategy Portfolio, prefers Germany, Switzerland and Austria to the United States.

Ryan Caldwell, who helps oversee the $2.1 billion Waddell Advisors Asset Strategy Fund, has 25 percent of his holdings in U.S. equities, half his investment in foreign companies. Investors are increasingly concerned about a U.S. housing recession, the falling dollar, and deteriorating consumer confidence.

"The gains in the U.S. were fun while they lasted, but we feel like growth lies outside the country," Stattman, 55, said from his office at BlackRock in New York.

The BlackRock fund rose at an average annual pace of 12.4 percent in the last five years, compared with the 8 percent return of the U.S. benchmark Standard & Poor's 500 index.

The Waddell fund climbed at an annual pace of 14.8 percent.

Goldman's fund advanced at an average yearly rate of 13.2 percent in the same period. It is one of just five U.S.-based mutual funds that have outperformed the S&P 500 for eight straight years, according to data compiled by Chicago-based Morningstar Inc.

The funds are the top three performers among nine in the global asset-allocation category tracked by Bloomberg. The BlackRock fund has appreciated 5.1 percent this year, the Goldman fund rose 6.1 percent, and the Waddell fund returned 6.6 percent, beating the 4.9 percent advance of the S&P 500.

The fund managers increased their holdings of international stocks as U.S. shares underperformed. Non-U.S. stocks, measured by the Morgan Stanley Capital International index of developed countries in Europe and Asia, have climbed at an average annual pace of 25 percent since the start of 2003, beating the S&P 500's 14 percent gain.

Performance was even better in emerging economies, led by Brazil and Russia, which are benefiting from a boom in commodities, and India and China, where people are spending more on cars, telephones and travel. The MSCI index of emerging economies has risen at a yearly rate of 35 percent since the beginning of 2003.

Investing outside the United States "can carry additional risk," said Michael Herbst, an analyst at Morningstar. "These managers can go anywhere, and if they get their global outlook wrong, the fund takes a hit."

Emerging-markets stocks slumped 10 percent in five days beginning Feb. 27 on concern that world economic growth would slow, pulling down indexes from Russia to the Philippines. The S&P 500 fell 5.2 percent in the same period.

The average global asset-allocation fund has 43 percent of its money in the United States, compared with 49 percent a year ago and 63 percent five years ago, according to Morningstar. Asia accounts for 23 percent, twice as much as five years ago, and Europe represents 29 percent, up from 23 percent.

At BlackRock, Stattman has 21 percent of his fund's assets in U.S. and Canadian equities and 34 percent in international stocks. About 2.6 percent is in Indian stocks, which is more than the combined holding in Switzerland, the Netherlands, Spain and Ireland. The fund's third-largest holding at the end of 2006 was Mumbai-based Reliance Industries Ltd., India's biggest chemical-maker.

Stattman, a former pension officer at the World Bank, said consumer spending would bolster the Indian economy as incomes rose in the nation of 1.1 billion people. India's per-capita income will quadruple from today's $586 a year by 2020, according to estimates by Goldman analysts.

At Goldman, Domotorffy, who is responsible for implementing strategy for the New York firm's $6.3 billion in asset-allocation funds, soured on U.S. stocks at the end of last year as the dollar fell. Fifty-nine of 71 currencies have climbed against the dollar in the last six months, according to data compiled by Bloomberg.

International stocks excluding real estate account for more than 40 percent of the Goldman Sachs Growth Strategy Portfolio, up from 32 percent at the end of last year, according to fund documents. Domotorffy said she was "overweight" in Germany, whose benchmark index has returned 15 percent this year, and Switzerland, whose index has returend 10 percent. She has about 38 percent of assets in U.S. stocks.

"The U.S. equity market looks unattractive, looks more expensive," Domotorffy, 31, said. "International is a better deal" when considering economic indicators, she said.

Half of Waddell Asset Strategy is invested in international stocks, up from 32 percent a year ago, said Caldwell, who manages the fund with Michael Avery and Dan Vrabac at money manager Waddell & Reed in Overland Park, Kan.

Caldwell, 32, said accelerating economic growth and corporate profits had made emerging markets a better investment, especially in China, India, Russia, Southeast Asia and Eastern Europe. The managers are bullish on technology, health care, financial services and alternative energy. Chicago Mercantile Exchange Holdings Inc. is the sole U.S. company in the fund's top five holdings, according to Waddell's most recent report.

Looking for Gains Outside the United States

BlackRock Global Allocation Fund

Assets:

$18.1 billion.

Performance: Up 13 percent in the last 12 months.

Ticker: MDLOX.

Goldman Sachs Growth Strategy Portfolio

Assets:

$2.3 billion.

Performance: Up 15 percent in the last 12 months.

Ticker: GGSAX.

Waddell Advisors Asset Strategy Fund

Assets:

$2.1 billion.

Performance: Up 8 percent in the last 12 months.

Ticker: UNASX.

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