Here is my take on international funds. There are essentially two kinds of funds, "developed" and "emerging markets".
In the 25 years I have been investing, no "emerging market" has ever "emerged" into anything. They are still the same war-torn, dictator-led, poverty-stricken countries they were in 1993. Governments and companies have extracted natural resources but little has been invested in the lands and people. I have seen this first hand in my 17 years of military service.
"Developed" markets have proven to have substantially lower returns over the last 10 and 15 year periods than the US. Take the Thrift Savings Plan funds as an example. The C Fund (pegged to the S&P 500), S Fund (Dow Completion Index), and I Fund (MSCI EAFE-Europe, Australasia, Far East Index) all were priced at $10/unit in 2003 and have the same expense ratios and dividends reinvested. 15 years later, here are the prices:
C Fund: $38.4041 (284% gain)
S Fund: $49.1028 (391% gain)
I Fund: $30.5371 (205% gain)
Here average annual returns over the last 10 years:
C Fund: 7.00%
S Fund: 8.13%
I Fund: 1.02%
Anyone want to venture a guess as to why? Here is mine: despite the talking heads on MSNBC, Fox News and other outlets I don't watch, the US has a stable and mature regulatory environment, a stable and mature judiciary, a stable and mature economy, a stable and mature currency, stable and mature access to natural resources, a stable and mature food source, a stable population trajectory, oceans on either side that provide a formidable environmental buffer from external threats, the longest friendly border in the world, and the strongest military the world has ever seen. Of course, nothing is perfect, but I would rather do business here than any other place.
Will there be better years outside the US than inside? Sure, but on the whole the business environment in the US will be far superior to the rest of the world for a long time to come.
Yet, if anyone still wants international exposure, our companies are, in fact, exposed to every nation on earth except for a select few that are subject to politically-imposed sanctions.