Global investors have poured a net $104 billion into international developed-market equity funds so far in 2026, four times the roughly $25 billion that flowed into U.S. Stock funds, according to Bank of America research reported by The Globe and Mail. The fund flows have coincided with a performance gap: the Vanguard Total International Stock ETF, VXUS, is up about 11% year-to-date while the S&P 500 is roughly flat, up about 0.5%, and the Nasdaq-100 has fallen about 1.2%. Bank of America strategist Michael Hartnett described the movement as a "new world order" in which investors are reallocating away from the U.S. Economy and the U.S. Dollar, a dynamic the research links in part to currency moves. For many portfolio managers, the combination of cash flows, regional weightings and a weaker dollar is changing how global equity exposure is sourced and sized.

The scale of the 2026 shift is striking. Bank of America research reproduced in The Globe and Mail shows $104 billion net inflows into international developed-market stock funds year-to-date, versus about $25 billion into U.S. Stock funds. Those numbers indicate investors are tilting toward broad foreign exposure rather than loading up on single-country bets, according to the same analysis.

Where the money went

Flows have concentrated into broadly diversified vehicles. The Vanguard Total International Stock ETF, VXUS, which offers exposure to 8,691 stocks across Europe, the Pacific, the Middle East and emerging markets, has been a primary beneficiary. The Globe and Mail reproduced Bank of America’s fund-weight breakdown for VXUS, showing Japan at 15.1% of the fund, the United Kingdom at 9%, China at 8.5%, Canada at 7.8% and Taiwan at 6.4%.

Those regional weightings help explain both the magnitude of flows and the performance gap between U.S. And international benchmarks. Investors buying VXUS gain broad geographic diversification in a single trade. The fund’s roughly 11% year-to-date rise has outpaced U.S. Large-cap benchmarks, and that has drawn fresh allocations from institutions and retail investors alike, according to the Bank of America research cited by The Globe and Mail.

Why investors are shifting

Michael Hartnett, Bank of America’s chief investment strategist, framed 2026 as a "new world order" for international stock investors. The research links two practical forces. First, currency moves have made a direct difference. A weaker U.S. Dollar amplifies dollar returns on assets priced in other currencies. That makes foreign equities more attractive to U.S.-based investors, and it raises the realised returns of international funds for holders who report in dollars.

Mastheads

Second, the flows themselves appear to be not just a fleeting chase of one strong ETF but a broader preference for international developed markets. The $104 billion figure is roughly four times the $25 billion going into U.S.

Funds, a gap the research presents as evidence of a tactical rebalancing by institutions and asset allocators toward Europe, Japan and other developed markets.

Hartnett’s language is intentionally sweeping. Calling it a "new world order" signals that strategists at Bank of America see this as more than a short-term rotation. The Globe and Mail’s report reproduces the firm’s analysis without offering separate corroboration of every number, so the picture rests primarily on BofA’s datapoints and interpretation.

The performance numbers are plain. VXUS up about 11% year-to-date, the S&P 500 roughly flat at about 0.5% gained, and the Nasdaq-100 down roughly 1.2% year-to-date. Those outcomes have a self-reinforcing quality. Strong returns draw fresh inflows, and fresh inflows can support further gains in the vehicles that receive them. Bank of America’s data imply that this feedback loop is now operating more heavily outside the U.S. Than inside it.

For Canadian investors, the breakdown of VXUS matter. Canada ranks as a top-five country weighting in the fund at 7.8%, according to the Globe and Mail’s reproduction of the BofA table. That exposure means Canadian equities within an international basket are helping domestic investors capture global diversification while also participating in the outperformance shown by the ETF so far this year.

The research doesn't confine the story to passive index chasing. By emphasising broad, multi-country funds rather than single-market bets, Bank of America’s analysis suggests many investors are seeking diversified foreign exposure as a strategic allocation rather than a short-term trade. Currency effects amplify that strategy for dollar-based investors, and regional leadership in 2026 has so far favoured Europe, Japan and other non-U.S. Developed markets.

At the same time, the reporting notes a limitation. All of the core figures, the Hartnett comment and the ETF weightings in the Globe and Mail piece come from a single Bank of America research report. The article doesn't include additional independent confirmation of the $104 billion, the $25 billion, or the 11% VXUS return beyond BofA’s data reproduced in The Globe and Mail.

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The clearest takeaway is the scale of the reallocation: $104 billion net into international developed-market equity funds year-to-date, roughly four times the $25 billion directed to U.S. Stock funds. VXUS’s roughly 11% gain so far, and its 7.8% Canada weighting, show how broad international vehicles are carrying the move.

This article was created with AI assistance.