After a decade of dominance by U.S. equities, global investors are shifting capital toward Asia as expectations of looser U.S. monetary policy, a weaker dollar, and the region’s accelerating AI boom redefine market opportunities, according to Bank of America (BofA).
Ahead of the BofA Securities Asia Pacific Conference, which begins Monday, Candace Browning, the bank’s head of global research, said Asia is increasingly becoming a magnet for global capital.
According to Browning, “We’re seeing clients diversify away from the U.S. into Asia. The stimulus potential is significant, competition in the tech space is real, and valuations here provide a buffer compared to expensive U.S. stocks.
“Asia is the backbone of the global AI supply chain,” she said. “The region underpins nearly every layer of the AI stack and can drive both hardware production and software innovation”, Browning added.
From the first half of 2020 through the end of 2024, U.S. equities attracted a staggering US$1.2 trillion in inflows, compared with just US$200 billion for the rest of the world combined.
However, momentum has slowed this year. So far in 2025, investors have evenly split allocations between U.S. equity funds and international markets, sending roughly US$50 of every US$100 to non-U.S. destinations, BofA data shows.
Lower U.S. yields and expectations of Federal Reserve rate cuts in 2025 – 2026 are driving renewed interest in Asia’s equity and debt markets.
The AI revolution is a major catalyst. BofA projects that the global AI market will quadruple from US$300 billion in 2025 to nearly US$1.2 trillion by 2030, with Asia-Pacific expected to capture about US$1 trillion of that growth, led by mainland China’s expanding AI ecosystem.
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