To summarize, our study provides the rst evidence of local stock-picking skills of country- focused mutual funds. Further, we show that these skills are time-varying, and are best captured through the use of macroeconomic variables. To return to the issue of industry vs. country in Europe, we nd evidence that much more e ort is spent on managing and o ering country-focused funds, although sector-focused funds are gaining in popularity in Europe. As such, it appears that the industry vs. country debate is not yet resolved in the asset management world. And, to answer our earlier question, country funds continue to be important in capturing time-varying alpha, even with.
