Key Points
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U.S. stocks are getting roundly beaten by the rest of the world so far in 2026, with the Vanguard Total International Stock ETF up 11% year to date.
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Research from Bank of America shows that global investors are putting four times as much cash into international stocks as U.S. stocks in 2026.
Many American investors might not realize it, but so far in 2026, the U.S. stock market has not been the strongest in the world. Year to date, the S&P 500 is basically flat (up about 0.5%), and the tech-heavy Nasdaq-100 has fallen 1.2%. Both have been soundly outperformed by the Vanguard Total International Stock ETF (NASDAQ: VXUS), which is up 11% year to date.
What’s driving the strong performance of international stocks? Let’s look at why investors might want to buy non-U.S. stocks in 2026.
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Money is flowing 4:1 to international markets
According to Bloomberg , a recent research report from Bank of America found that so far in 2026, more money is going to international stocks than American stocks. The BofA research found that a combined $104 billion of money flows have gone to stock funds in international developed markets such as Europe and Japan, while only $25 billion of flows have gone to U.S. stocks. That means four times as much investor cash is going to non-U.S. stocks.
A stock investor follows the global markets.
Image source: Getty Images.
BofA analyst Michael Hartnett called 2026 a “new world order” for international stock investors, with investors leading a global rebalancing away from the U.S. economy. Based on his research, Hartnett believes global investors are looking beyond the U.S. market and avoiding the U.S. dollar.
A weaker dollar could be good news for U.S. investors who own international stocks. When the dollar loses value, those foreign currency-denominated assets become more valuable in dollar terms. For example, if you own a share of a European company priced in euros and the dollar loses 10% of its value against the euro, that euro-denominated share price goes up 10% in dollars.
How to buy international stocks easily
If you want an easy way to diversify your portfolio without relying too much on U.S. stocks or to protect your savings from a declining dollar, investing in international stocks could be a good strategy. The Vanguard Total International Stock ETF can be a good way to buy international stocks.
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This ETF gives you exposure to 8,691 stocks representing a wide range of the world economy, with regions including Europe, the Pacific, the Middle East, and emerging markets. Top countries represented include Japan (15.1% of the fund), the United Kingdom (9%), China (8.5%), Canada (7.8%), and Taiwan (6.4%).
The fund lets you own some of the world’s most innovative and successful companies, such as Taiwan Semiconductor Manufacturing (3.2% of the fund), Samsung Electronics (1.2%), Alibaba Group (0.9%), Toyota Motor (0.6%), and thousands more. The expense ratio is a low 0.05%.
This international ETF is cheaper than American stocks, with a price-to-earnings ratio of only 19.1, compared to 27.6 for the S&P 500. If you want to diversify your portfolio and capitalize on a possible rebalancing in global stock markets, buying VXUS could be a good choice for long-term investors.
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Bank of America is an advertising partner of Motley Fool Money. Ben Gran has positions in Vanguard Total International Stock ETF. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing and Vanguard Total International Stock ETF. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.