However, I'll be the
devil's advocate for a minute (I mostly buy index funds). Here are three global ex-US funds, all benchmarked by the same index in Morningstar (MSCI ACWI Ex USA NR USD). Two are index funds, one is actively managed. The active fund has about 0.7% more ER. Vanguard and Schwab are following different benchmarks though, FTSE vs MSCI, but that's all they have so I can't match that.
Vanguard FTSE All-Wld ex-US Idx Admiral VFWAX, index fund, 0.14% net ER
Schwab International Index SWISX, index fund, 0.19% net ER
Schwab International Core Equity Fund SICNX, actively managed, 0.86% net ER
The table below shows the funds' returns for 2010-14, 2015 YTD, and 5 yr (annualized and total)
after fees. As you can see, the actively managed fund is never the lowest performing fund for any of the 6 years shown and beats the two index funds over a 5 year period. It's total 5 yr return is 21% higher than VFWAX and 11% higher than SWISX.
So, a low ER helps to obtain, but
does not guarantee, a better return.
History (04/30/2015) | 2010 | 2011 | 2012 | 2013 | 2014 | YTD | 5yr ann | 5yr total |
VFWAX | 11.85 | -14.21 | 18.52 | 14.49 | -4.05 | 9.32 | 8.29 | 148.9 |
SWISX | 6.61 | -11.71 | 18.93 | 21.64 | -5.74 | 9.38 | 10.20 | 162.5 |
SICNX | 10.51 | -12.10 | 23.73 | 23.95 | -4.49 | 11.62 | 12.48 | 180.0 |
Note - I looked at VTIAX also. It has very similar performance to VFWAX but does not have a 5yr return yet.