Poll: American Investors Say U.S. Losing Economic Dominance

NEW YORK -- A majority of American investors believe the United States will lose its leading economic role in the world in the next 10 years, but most people have yet to put some of their investments overseas, according to a recent survey conducted on behalf of asset manager Schroders PLC.

The survey of 1,030 U.S. investors showed that just 38 percent of Americans believe the United States will be the leading economic power in the next 10 years. Forty-five percent said China would take that role, with less than 5 percent of investors believing India, Russia or Germany would become the global economic leader.

Yet only 13 percent of investors have money in international stocks, according to the survey. And of the 32 percent of investors who own mutual funds, just over half include international investments in their portfolios.

"There's always a certain home-country bias when it comes to investing," said Virginie Maisonneuve, head of EAFE equities at Schroder Investment Management. "And there are limited 401(k) offerings as well as a lack of experience investing overseas."

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Maisonneuve said continuing growth in international stock markets, particularly in China and India, should prompt more investors to look overseas. Indeed, 19 percent of Americans said they planned on investing in international stocks in the next five years. "There's already a great deal of education going on," Maisonneuve said. "Americans will catch up to the potential."

Until then, Americans remain conservative in their investing habits. Certificates of deposit and savings or money market accounts were the most popular form of investing, with 50 percent of those surveyed investing in them. After mutual funds, 26 percent of those surveyed had money in domestic stocks. But a surprising 31 percent did not invest in stocks, bonds or funds, either domestic or international. In the next five years, 25 percent said they still did not plan to put money in those investments.

The poll was conducted on behalf of Schroders Investment Management by ICR-International Communications Research. A nationally representative sample of 1,030 U.S. investors, age 18 and up, was interviewed by phone from May 31 through June 4, 2007. The margin of error was plus or minus 3 percent.

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