Recent research from Bank of America indicates that international stocks may be on the verge of outperforming their American counterparts. A report highlighted by Bloomberg reveals that international developed market stock funds have attracted a remarkable $104 billion in new investments in 2026, while U.S. stock funds have only seen $25 billion in inflows.
Bank of America analyst Michael Hartnett describes this emerging trend as the “anything but dollar” trade. Investors appear to be looking for opportunities outside of the U.S., largely driven by a weaker dollar. Over the past year, indices such as the S&P 500 and the tech-heavy Nasdaq-100 have been outperformed by exchange-traded funds (ETFs) focusing on European, Pacific, and emerging markets.
These international markets are benefiting from burgeoning demand for commodities and technology—particularly in sectors tied to artificial intelligence (AI), which is pushing investment into areas like rare-earth minerals and semiconductors. Additionally, shifts in American trade policy and uncertainty surrounding tariffs may also be influencing the trend toward international investments.
For American investors interested in diversifying their portfolios, the Vanguard Total International Stock ETF (NASDAQ: VXUS) presents a straightforward option. This ETF offers exposure to 8,691 stocks from various countries, including Japan, the United Kingdom, China, Canada, and several others, all at a low expense ratio of 0.05%. The fund’s holdings are well-distributed, with approximately 37.9% in European stocks, 26.4% in Pacific stocks, and 26.6% in emerging markets, alongside a small portion from North America.
While there’s no certainty regarding the continuous rise of international stocks, the Vanguard Total International Stock ETF has gained nearly 12% so far in 2026, significantly surpassing the performance of both the S&P 500 and the Nasdaq-100. For those concerned about a potential downturn in AI stocks or the weakening dollar, or simply wishing to diversify their investments globally, this ETF could be a beneficial choice.
However, potential investors should consider other options as well. Analysts from The Motley Fool Stock Advisor recently identified ten high-potential stocks that are worth investigating, which did not include the Vanguard Total International Stock ETF. Historical data underscores the significance of these recommendations—stocks like Netflix and Nvidia saw exponential returns after being featured.
While the Vanguard Total International Stock ETF offers a low-cost entry into the global market, it’s essential to weigh all your investment options carefully and to stay informed about the latest opportunities available in the stock market.
