For instance, we take the political stability of the United States for granted as a given. But this cannot be assumed everywhere in the world. Overall, investing overseas requires considerably more time and research than investing in the United States. Operating expenses escalate in an international fund due to the relative inefficiency of foreign capital markets. Transaction costs are higher.
Taxes are higher.
Foreign currencies are always a factor. Foreign banks often charge more for both routine and specialized transactions. And some international securities have significant custodial fees not found in U.S. stocks. However, you don't have to pay high expenses to get a good international stock fund, even one with active management. According to Morningstar, their expense ratios are 0.49 percent, 0.85 percent and 0.89 percent, respectively.