(Bloomberg) — Investors are pouring money into European equities at a rate not seen in almost decade as they anticipate a historic increase in spending on infrastructure and defense.

Regional funds attracted about $12 billion of inflows in the four weeks through March 5, the most since August 2015, according to Bank of America Corp. ( BAC ), citing EPFR data.

European leaders, including Germany’s Chancellor-in-waiting Friedrich Merz, have pledged to unlock hundreds of billions of euros for military and infrastructure spending as the US pulls back from its support for Ukraine. Weekly flows into the region’s equities are now at levels last seen before Russia’s invasion of its neighbor in 2022, BofA strategists including Michael Hartnett wrote in a note.

The repercussions of Germany’s plan to boost spending are likely to be consequential, Hartnett said. The “whatever it takes” European rearmament pledge implies fiscal excess in the euro region, while cuts to federal spending in the US hint at an era of fiscal austerity.

That means German bund yields are likely to trade above US Treasury yields by year-end, Hartnett wrote.

European stocks are comfortably outperforming US peers this year. The pan-European Stoxx 600 Index ( ^STOXX ) is up 8.5% year-to-date, it best start to a year since 2015, while the S&P 500 ( ^GSPC ) has shed 2.4%. The Nasdaq 100 ( ^NDX ) is on the edge of a technical correction.

That outperformance prompted a separate team of BofA strategists to downgrade their stance on European equities versus global peers to marketweight from overweight.