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 (VXUS 1.76%), 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.
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.
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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.
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%).
NASDAQ: VXUS
Key Data Points
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.
