Money managers gearing up for the Year of International Stocks

[Data particle around the Earth which with stock charts in cyber space]
Hiroshi Watanabe

International stocks (IDV [https://seekingalpha.com/symbol/IDV]), (VXUS [https://seekingalpha.com/symbol/VXUS]) are expected to outperform U.S. equities (SP500 [https://seekingalpha.com/symbol/SP500]), (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]), (DJI [https://seekingalpha.com/symbol/DJI]) in 2026, according to Bank of America’s Global Fund Manager Survey for November.

The survey revealed [https://seekingalpha.com/news/4523398-bofa-s-global-fms-most-fund-managers-see-international-stocks-as-the-best-performing-asset-in] that 42% of fund managers believe international stocks will be the best performing assets in 2026, while only 22% of respondents favor U.S. stocks, highlighting a significant shift in investor sentiment.

[Which of the following do you expect to be the best performing asset class in 2026?]
Which of the following do you expect to be the best performing asset class in 2026? (BofA Global Fund Manager Survey)

The survey also indicates that the MSCI Emerging Markets index (EEM [https://seekingalpha.com/symbol/EEM]) is predicted to be the top-performing equity index by 37% of investors, followed by the Nasdaq (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]) at 13%.

“Global rebalancing theme outperformed U.S. exceptionalism as U.S. trade, industrial and geopolitical policies spurred lower oil prices and new fiscal stimulus in China, Europe, and Japan,” said Michael Hartnett, chief investment strategist at BofA.

So far in 2025, international stocks have significantly outpaced U.S. equities with gains of 24.6% compared to 11.2% for U.S. stocks.

Gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) has been the standout performer with a remarkable 54.2% increase, while other assets showing positive returns include investment-grade bonds (PFIG [https://seekingalpha.com/symbol/PFIG]) (9.3%), high-yield bonds (PHB [https://seekingalpha.com/symbol/PHB]) (9.0%), and Bitcoin (BTC-USD [https://seekingalpha.com/symbol/BTC-USD]) (7.1%), according to the survey data.

The most overbought international equities are currently South Korean equities (EWY [https://seekingalpha.com/symbol/EWY]), up 30.7% from their 200-day moving average, followed by South Africa (EZA [https://seekingalpha.com/symbol/EZA]) (24.2%), Brazil (EWZ [https://seekingalpha.com/symbol/EWZ]) (17.2%), Spain (EWP [https://seekingalpha.com/symbol/EWP]) (15.3%), and Taiwan (EWT [https://seekingalpha.com/symbol/EWT]) (15.1%). U.S. equities rank considerably lower at 13th place, just 8.3% above their 200-day moving average, BofA analysts said.

In addition, global growth expectations have turned positive for the first time this year, with a net 3% of survey respondents expecting a stronger global economy. This represents a significant improvement from the previous month when expectations stood at -8%, according to the Fund Manager survey, signaling a potential shift in the global economic outlook.

MORE ON ISHARES MSCI EMERGING MARKETS ETF

* The Cost-Effective IEMG Beats The Legacy Fund EEM On All Grounds [https://seekingalpha.com/article/4828769-the-cost-effective-iemg-beats-the-legacy-fund-eem-on-all-grounds]
* EEM: Understanding The Original Emerging Market Equity ETF [https://seekingalpha.com/article/4822551-eem-understanding-original-emerging-market-equity-etf]
* EEM: New All-Time Highs In Sight As Relative Strength Persists [https://seekingalpha.com/article/4822189-eem-new-all-time-highs-in-sight-as-relative-strength-persists]
* Dollar weakness and policy credibility boost emerging market outlook, Morgan Stanley says [https://seekingalpha.com/news/4488678-dollar-weakness-and-policy-credibility-boost-emerging-market-outlook-morgan-stanley-says]
* Seeking Alpha’s Quant Rating on iShares MSCI Emerging Markets ETF [https://seekingalpha.com/symbol/EEM/ratings/quant-ratings]