Global fund managers are accelerating their retreat from US equities, with long-only funds offloading a net $284 billion in US stocks over the past 12 months as capital flows toward Europe, Japan, and emerging markets, Bank of America (NYSE: BAC) said in a research note published on Wednesday.
In March alone, funds sold $15.4 billion in US shares while directing $16.7 billion into European equities and $9.8 billion into Japanese stocks. Emerging markets and Asia Pacific ex-Japan drew inflows of $4.8 billion and $4.7 billion, respectively.
Active funds now hold their biggest overweight position in Europe and their largest underweight in the US. Year-to-date, US outflows have reached $131 billion, dwarfing flows into every other region.
“In the last three months, funds have cut exposure the most to USA,” BofA said in its note.
Sector allocation tracked the geographic shift. Healthcare attracted the heaviest buying in March, pulling in $17.9 billion and $16.1 billion across two sub-segments. Software and Diversified Financials shed $27.8 billion and $9.6 billion, respectively. AI-linked stocks led the technology selloff: among eight global investment themes BofA tracks, artificial intelligence recorded the steepest 12-month outflows at $93.3 billion, with Quantum Computing shedding $41.6 billion.
At the stock level, funds dumped Microsoft (Nasdaq: MSFT), Samsung Electronics (OTC: SSNLF), JPMorgan Chase (NYSE: JPM), and Nvidia (Nasdaq: NVDA) in March. Over the past year, Meta (Nasdaq: META) logged the largest cumulative outflows of any individual stock at $37.3 billion. Top March purchases included AstraZeneca (Nasdaq: AZN), Exxon Mobil (NYSE: XOM), Alphabet (Nasdaq: GOOGL), Johnson & Johnson (NYSE: JNJ), and Roche (OTC: RHHBY).
Active long-only funds drove the selling across most regions — Japan was the lone exception — while passive funds continued buying across the board.
BofA’s positioning screens add further texture. Its “Crowded Positives” screen, which flags heavily owned, outperforming stocks, currently highlights Broadcom (Nasdaq: AVGO), TSMC (NYSE: TSM), SK Hynix (KRX: 000660), ASML (Nasdaq: ASML), CATL-A (SZSE: 300750), and UniCredit (BIT: UCG). Its “Under-owned Negatives” screen — identifying low-ownership stocks with weak momentum — points to Coinbase Global (Nasdaq: COIN), Blackstone (NYSE: BX), JD.com (Nasdaq: JD), Datadog (Nasdaq: DDOG), Mercedes-Benz (ETR: MBG), and Saudi Arabian Oil (Tadawul: 2222).
BofA analyst Michael Hartnett calls it a structural break — declaring 2026 the year investors stopped treating US assets as the default and started building elsewhere.
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