Bank of America strategist Michael Hartnett stated that U.S. trade policy is creating a "new world order," prompting investors to move from the dollar and U.S. equities toward non-U.S. assets. In a report, the strategist wrote that the Trump administration's "overheating economy policy implies a new 'everything but the dollar' trade," as U.S. exceptionalism transforms into global rebalancing. Hartnett indicated this shift would benefit non-U.S. equities, particularly commodity-producing emerging markets poised to gain from rising AI demand. He also noted that investor allocations to China and India remain underweight.

Fund flows support Hartnett’s view. Data from EPFR Global cited by Bank of America shows that inflows into European, Japanese, and other developed international equity funds totaled $104 billion this year, significantly exceeding the $25 billion directed toward U.S. equity funds. Since former President Trump announced historic tariff measures last April, U.S. assets have experienced volatility, raising concerns about the end of American dominance in the global economy and financial markets. Although Trump later withdrew several tariff actions, the S&P 500 has underperformed international peer indices, while a key dollar index has declined 10% since late 2024.

Hartnett has favored non-U.S. stocks since the end of 2024. This call has proven prescient—while the S&P 500 rose 15% over the period, it lagged behind the MSCI All Country World ex-U.S. Index, which gained 39%. The rotation has continued into 2026, with European, Japanese, South Korean, and emerging market indices collectively outperforming U.S. stocks. A weaker dollar has further enhanced overseas returns, leading institutions to reduce U.S. stock concentration and pivot to more reasonably valued global markets.

Fund managers observe that the long-held perception of the U.S. market as the only worthwhile arena is beginning to change, and this trend is accelerating. According to Morningstar data, investors poured a net $5.16 billion into international stock ETFs in January, with monthly inflows rising substantially since late 2024. The dollar's decline—approximately 10% from its 2022 peak—has boosted the relative value of overseas corporate earnings, thereby lifting returns on foreign equities.

Although some investors label the current overseas allocation trend "Sell America 2.0," fund managers are quick to clarify that this wave of foreign stock buying does not constitute a full-scale divestment from U.S. assets. Many still believe U.S. equities will continue to lead global market gains, albeit with a narrower advantage than in recent years. Don Calcagni, Chief Investment Officer at Mercer, commented on the S&P 500's double-digit returns last year, stating, "If the 'sell America' trade gives me 16% returns, I'll take it every time. We still think the U.S. market is excellent." Nevertheless, like other institutions, Calcagni expressed concerns about the future of U.S. stocks, including mounting national debt and political and economic volatility associated with Trump. He added, "There is ample evidence that you don't necessarily have to sell America, but you should start underweighting U.S. stocks, rebalancing, and adopting a more balanced allocation."

Investors have also been monitoring sector rotation within the U.S. market. After three years of substantial gains driven by the AI investment boom, traders are seeking the next wave of growth opportunities elsewhere. The beneficiaries are not limited to overseas equities; U.S. small-cap and blue-chip stocks have recently outperformed major benchmark indices as well. While not every Wall Street firm is rushing to deploy capital abroad, Calcagni noted that investors' "singular obsession" with U.S. stocks is broadening. He said, "Many of our clients are now asking, why not allocate more to overseas companies? Investors may be rediscovering the creed of international diversification."