Much of the U.S. stock market's meteoric rise over the past six years has been predicated on an acronym that Wall Street refers to as TINA—There Is No Alternative.
The subtext is that with the U.S. moving faster than much of its counterparts around the globe, and with its central bank in extreme, unprecedented easing mode, there simply was no place else to grow money except on American shores.
2015 has seen the light start to dim on the U.S. bull market and shine more brightly in some unlikely corners of the world, like Russia, Israel and Japan. European stocks have staked their claim as new world leaders, and China and Japan equities have ripped higher as well.
Investors have taken notice in a big way, giving TINA some competition by spreading their money around the world.
Funds that focus on global equities have taken in $81.5 billion this year, a pace that, if continued, would break a record for four-month inflows in the category, according to data research firm TrimTabs. Thanks to a record $7.8 billion in European funds, March inflows are at $34.8 billion, also a single-month record, with April already showing a $14.8 billion inflow total. (The totals include mutual and exchange-traded products.)
"U.S. investors continue to follow the printing presses into European and Japanese equities," TrimTabs CEO David Santschi said in a statement that referenced central bank largess in those regions. "A record that has been held for nine years is almost sure to fall."
Flows, as they most often do, have followed performance.
The S&P 500 U.S. large-cap index has been a global laggard, registering just a 1.8 percent gain so far this year. U.S. small-caps have performed much better, with the Russell 2000 registering a 5.1 percent gain, but even that move is well behind many other global indexes.
The global market outperformance has created some interesting developments in the ETF industry. Over the past month in particular, funds that use leverage to double and triple returns of foreign indexes have soared in value.
The highest flier over the period has been the Direxion Daily FTSE China Bull 3X, a fund that uses leverage to triple the returns of Chinese depositary receipts on Chinese equities traded on U.S. exchanges. The fund has soared more than 88 percent over the past month.
Similarly, the Direxion Daily Russia Bull 3X is up about 48 percent during the period, while the Direxion Brazil Bull 3X has surged 39.5 percent and the Direxion Daily Emerging Markets Bull 3X has returned 39.2 percent.
Those are highly risky moves, however, and investors can choose from a slew of funds that play both emerging and developed markets outside the U.S., where strategists say fertile ground is ahead.
John Higgins, chief markets economist at Capital Economics, has his eye on emerging markets.
"A confluence of factors probably accounts for the recent generalized strength of emerging market equity prices," Higgins said in a report for clients Tuesday. "These include signs of stabilization in commodity prices at lower levels, an associated rebound in some emerging market currencies, a sense that the pace of monetary tightening in the U.S. may be slower than previously envisaged and actual monetary loosening in a number of emerging market countries themselves."
To be sure, investors have not shunned the U.S. completely, with positive inflows this year to U.S funds. However, there definitely is apprehension in the air, with the SPDR S&P 500 ETF, a plain-vanilla fund that tracks the index of the same name, sustaining $41.6 billion in outflows year to date.
Bank of America Merrill Lynch told clients it has grown cautious on U.S. equities and has decided to increase its cash allocation until a better re-entry point emerges.
Like the rest of the Wall Street, BofAML is anxiously awaiting clearer direction from the Federal Reserve. The Fed is expected to increase interest rates later in 2015 for the first time in nine years, but the pace of tightening remains unclear amid much slower economic growth in the first quarter than anticipated.
"We are raising our allocation to cash slightly because we view cash as a good place to hide out for the time being," fixed income strategist Martin Mauro and others said in a note to clients. "Also, returns should improve modestly once the Fed begins raising rates. We would become more inclined to maintain or expand our new cash position if we changed to a more aggressive view of Fed rate hikes."