International stocks have been predicted to lead in global investor strategy in the next five years, with the United States falling behind. According to a survey carried out by the Bank of America in June, it found out that money managers are betting hard on foreign equities to deliver the best returns through 2030.
The numbers are not good for the United States, with less than 25% of those surveyed think American assets will lead the pack. Just 5% expect bonds to perform best. The rest are moving their cash outside the US borders.“Less than [one quarter] think US assets will continue to dominate ranked returns,” Bank of America strategist Michael Hartnett spelled it out in the report. Instead, investors are now crowding into emerging markets, Eurozone equities, and banks. The confidence in US stocks has dropped hard, and the reasons aren’t subtle.
International stocks are set to rise as investors move away from the dollar
Since the beginning of 2025, the numbers speak for themselves. The iShares MSCI All-Country World Index ex-US ETF (ACWX) is up 15% this year. The S&P 500? Just 2.6%. That puts ACWX at its highest outperformance versus the S&P 500 since the fund was created in 2008. The rotation out of the US isn’t a theory—it’s already happening. Meanwhile, confidence in the US dollar has collapsed. Investor positioning in the dollar has dropped to the lowest point in over 20 years.
The big driver here is President Donald Trump’s aggressive trade stance. Earlier this year, the White House slapped steep tariffs on imports. Some of those were paused for 90 days during talks with major trade partners, but the threat hasn’t gone away. Uncertainty around trade has made investors question the dollar’s status as a safe place to park money.
That vacuum has pulled capital into gold, which has become the top pick for the third straight month. Harnett said that 41% of investors also ranked gold as their most crowded trade. The long run of the Magnificent 7 tech stocks being the dominant bet is now over, with that trade falling to 23%. That “Magnificent 7” trade had held the top spot for two full years, but it’s officially been dethroned.
According to the rest of the survey, the outlook of the US has really become bad in the eyes of investors. In June, fund managers were most overweight in the Eurozone, EM, and banks, while the biggest underweights were US stocks, the US dollar, and energy. The reallocation is big and sharp and it is not about trimming exposure, it is a clear message that the big money is going elsewhere.
Another issue is that volatility is playing into all this, with tensions in Europe and the Middle East pushing even more capital into defensive trades like gold. But investors aren’t running from all risk—they’re just picking different bets. That’s why global equities, especially in developing markets, are seeing more inflows. Stocks in those regions are cheaper than the US, and right now, that’s more attractive than anything trading at a premium on Wall Street.