This examination of developed and emerging markets suggests that toward the end of the 20th century, sector effects caught up with country effects in the developed markets of the world, as a result of rising sector effects rather than declining country effects. For emerging markets, however, country effects have remained the dominant influence relative to sector effects, although the importance of country effects has been on a steady decline. These results confirm that international equity managers should emphasize sector-based approaches when investing in the developed countries but should continue country-based allocation strategies in emerging markets.