South African stocks, he said, might well outpace domestic equities in the years ahead.

In fact, of the last 14 bull markets in domestic equities, only four lasted five years or longer.

Arthur Kirsch, 37, the head of research, became director of domestic institutional equity.

Investors often look for the group with the best record in domestic equities, and for good reason.

To be sure, domestic and overseas equities are more in sync with each other than they have ever been.

The firm operates as an investment bank both in the domestic and international equity and debt capital markets.

"In 1990, net outflows from domestic equity mutual funds totaled $4 billion," he said.

Over the next seven years, he predicts, domestic equities will deliver average annual returns of only around 1 percent.

For the new study, the researchers looked at all actively managed domestic equity mutual funds in the United States over the 10 years through 2003.

To find a worse period for domestic equity mutual funds, you need to go back even further, to the third quarter of 1981.