7 reasons why global stocks are set to crush their US counterparts for the first time in 15 years, according to Bank of America

According to Bank of America, US investors are in for a wake-up call if they don't avoid home-bias.

After 15 years of falling behind, the bank said in a Friday note that it expects global stocks to beat US stocks in the next five years.

The note said that $100 invested in US stocks from March 2008 to today is worth more than $100 invested in non-US global stocks over the same time period.

According to BofA investment strategist Michael Hartnett, the US is set to lose money in the next five years.

According to BofA, there are seven reasons why investors should expect US stocks to perform better than their global counterparts in the years to come.

This is the first thing. The bubble that yielded negative interest rates is over.

Secular growth stocks in the US performed better than the rest of the world. BofA said that non-US value stocks would perform better than US ones. According to the bank, the $18 trillion in negative yielding debt in 2021 has shrunk to $0, ending the negative interest rate bubble.

Bank of America

There are two China is back in business.

The BofA said that the Zero- Covid policy exit will unleash years of precautionary savings. As China's economy fully reopens, the central bank is expected to make it easier to borrow.

There are three. The US has a lot of exposure to tech stocks.

All tech accounted for 40% of the US equity market in the last quarter of the year. Derating of tech driven by regulation, penetration rates well underway, yet investor rotation out of tech sector yet to begin hurts US more. The US would suffer the most from a rotation out of technology stocks.

Bank of America

There are four. The stock is being bought back.

Over the past 15 years, the US stock market has seen $7.5 trillion of stock buy backs. BofA said that higher rates and a 1% tax on buy backs will make debt issuance less self serving.

There are five. The price of energy.

BofA said higher oil prices mean oil exporters are better off, while lower oil prices mean oil imports are better off. US benchmark crude prices have fallen more than any other country in the last four years.

There are six. The currency of the United States.

According to BofA, the dollar will fall in 2023 as political tensions in the US improve. If faith is lost in the world's reserve currency, a drop in the US dollar could have a negative effect.

There are seven. There was a positioning from the year 2022.

European equity outflows will be $107 billion in 2022. BofA said that the US hit an all-time high with its share of the market. If the trend is reversed, European and US stocks could go up in value.