Bank of America’s latest research reveals a significant rotation into non-US equities, driven by a softer dollar and opportunities beyond American markets, with international funds attracting record inflows in 2026.
New research from Bank of America suggests a notable rotation into non‑US equities as investors broaden exposure beyond American markets after a period of dollar weakness and strong US‑tech leadership. According to the Bank of America report cited by Bloomberg, international developed‑market stock funds have drawn about $104 billion of net new investment so far this year, compared with roughly $25 billion flowing into US stock funds. Michael Hartnett, the bank’s chief investment strategist, described the pattern as the “anything but dollar” trade.
The shift has been visible in market performance. Over the past year, index exchange‑traded funds tracking European, Pacific and emerging‑market equities have outpaced both the S&P 500 and the Nasdaq‑100, a trend the BofA analysis highlights as investors chase opportunities outside the United States. The report points to several drivers: a softer dollar, growing demand for commodities and technologies linked to artificial intelligence , including semiconductors and certain rare‑earth inputs , and uncertainty around US trade policy and tariffs that has encouraged capital to seek alternatives.
For US investors seeking broad overseas exposure, Vanguard’s Total International Stock ETF (VXUS) is presented as one simple option. Vanguard data show the fund holds more than 8,600 stocks across developed and emerging markets, with regional weightings that include substantial allocations to Europe, the Pacific region and emerging markets. Vanguard reports the ETF has a headline expense ratio of 0.05% and has delivered strong returns recently , rising nearly 12% in 2026 to date and posting double‑digit total returns in both 2024 and 2025.
Vanguard’s wider positioning underpins that offering. The firm has announced extensive fee reductions across its lineup for 2026, amounting to around $250 million in lower costs across dozens of share classes and funds, and says it continues to target industry‑leading low average expense ratios. In its 2026 Economic and Market Outlook Vanguard also flags artificial intelligence as an influence on global growth, noting the technology’s potential to lift returns broadly even as it expects US equities to remain a source of solid performance over a multi‑year horizon.
Market commentators and strategists caution that past outperformance is no guarantee of future results. The Bank of America analysis indicates momentum behind international flows and the potential for further relative gains if the dollar remains subdued, but investors should weigh currency, geopolitical and sectoral risks that can affect returns outside the United States. For those seeking diversification from concentrated US tech exposure, low‑cost, broadly diversified international ETFs such as VXUS offer one pragmatic route to access a wider slice of the global economy.
- https://finance.yahoo.com/news/104-billion-flowing-international-stocks-213500460.html – Please view link – unable to able to access data
- https://www.bofaml.com/research/international-stocks-outperform-us-equities – A Bank of America report indicates that international developed market stock funds have attracted $104 billion in new investments this year, surpassing the $25 billion inflow into U.S. stock funds. Analyst Michael Hartnett attributes this trend to the ‘anything but dollar’ trade, where investors seek opportunities in international markets amid a weaker U.S. dollar. Over the past year, European, Pacific, and emerging market stock index ETFs have outperformed the S&P 500 and Nasdaq-100 indices.
- https://www.vanguard.com/international-stock-etf-performance-2026 – The Vanguard Total International Stock ETF (VXUS) has demonstrated strong performance in 2026, with a nearly 12% increase, significantly outperforming the S&P 500 and Nasdaq-100 indices. This ETF provides exposure to 8,691 international stocks across countries like Japan, the UK, China, Canada, Taiwan, and France, with an expense ratio of 0.05%. It offers a diversified portfolio, including European (37.9%), Pacific (26.4%), and Emerging Markets (26.6%) stocks.
- https://www.vanguard.com/expense-ratio-reductions-2026 – Vanguard has announced significant cost reductions across its investment lineup, with nearly $250 million in fee reductions expected in 2026 alone. These reductions apply to 84 mutual fund and ETF share classes across 53 funds, reflecting Vanguard’s commitment to providing low-cost, high-performing funds for investors. The firm’s average expense ratio now stands at 0.06%, among the lowest in the industry, underscoring its longstanding cost leadership across asset classes and investment styles.
- https://www.vanguard.com/2026-economic-market-outlook – Vanguard’s 2026 Economic and Market Outlook highlights the impact of artificial intelligence (AI) on global markets. The report anticipates that AI will drive economic growth, particularly in the U.S., leading to a projected 4%–5% average return for U.S. equities over the next 5 to 10 years. The outlook also suggests that international developed-market equities may benefit as AI’s influence on growth broadens beyond the U.S. technology sector.
- https://www.vanguard.com/international-stock-etf-performance-2025 – In 2025, the Vanguard Total International Stock ETF (VXUS) achieved a total return of 32.23%, outperforming the S&P 500 and Nasdaq-100 indices. The ETF’s diversified holdings across European, Pacific, and Emerging Markets contributed to its strong performance, offering investors exposure to a broad range of international stocks with a low expense ratio of 0.05%.
- https://www.vanguard.com/international-stock-etf-performance-2024 – The Vanguard Total International Stock ETF (VXUS) reported a total return of 24.92% in 2024, surpassing the S&P 500 and Nasdaq-100 indices. The ETF’s diversified portfolio, including European, Pacific, and Emerging Markets stocks, provided investors with exposure to a wide range of international equities, contributing to its strong performance.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article references a Bank of America report on international stock inflows, with data from February 2026. Similar information has been reported by reputable sources such as The Motley Fool and Bloomberg, indicating that the content is current and not recycled. ([fool.com](https://www.fool.com/investing/2026/03/01/104-billion-is-flowing-to-international-stocks/?utm_source=openai))
Quotes check
Score:
7
Notes:
The article includes direct quotes attributed to Michael Hartnett, Bank of America’s chief investment strategist. While these quotes are consistent with those found in other reputable sources, the exact origin of these quotes is not independently verifiable in the provided search results. This raises concerns about the authenticity and originality of the quotes. Without direct access to the original Bank of America report or a primary source, the verification of these quotes remains uncertain.
Source reliability
Score:
6
Notes:
The article is published on Yahoo Finance, which aggregates content from various sources. While Yahoo Finance is a widely used platform, it often relies on third-party content, which can affect the reliability of the information presented. The original source of the data appears to be Bloomberg, a reputable news organization. However, the lack of direct access to the original Bloomberg article or the Bank of America report limits the ability to fully assess the reliability of the information.
Plausibility check
Score:
7
Notes:
The article discusses a significant shift in investment patterns, with $104 billion flowing into international stocks compared to $25 billion into U.S. stocks. This trend aligns with recent analyses indicating a preference for international equities over U.S. stocks. However, the article’s reliance on aggregated data from third-party sources without direct access to the original reports raises questions about the accuracy and completeness of the information.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents information on significant investment inflows into international stocks, referencing data from February 2026. While the content appears current and aligns with recent analyses, the reliance on aggregated data from third-party sources without direct access to the original Bank of America report or Bloomberg article raises concerns about the accuracy and reliability of the information. The inability to independently verify the quotes and data further diminishes the overall credibility of the article.