© depositphotos/[email protected] Investors are shifting their focus from the US to international markets.
American investors are pulling capital from their own stock market at the swiftest rate in at least 16 years, amidst diminishing profits of technology powerhouses and the increasing appeal of global markets, according to Reuters.
U.S.-based investors have removed approximately $75 billion from U.S. equity assets over the last six months. These exits have amounted to $52 billion since the onset of 2026, marking the largest in the initial eight weeks of the year since at least 2010, based on LSEG/Lipper data.
This occurs despite the dollar's weakness against other currencies, making foreign asset acquisition more costly for Americans. Simultaneously, the trend intimates that diversification away from U.S. assets, a move initiated by some global investors over the past year, is gaining traction among Americans themselves.
Following the end of the global financial crisis in 2009, the “buy American” approach (an investment strategy centered on allocating funds to American assets, chiefly the US stock market) yielded gains for investors both domestically and internationally – attributable to a robust economy, escalating corporate earnings, and the dominance of the tech sector, which fueled the superior performance of American equities.
The recent fervor around artificial intelligence propelled the S&P 500 index to unprecedented highs last year, offering a form of protection from US President Donald Trump's erratic trade and foreign policy stance, alongside his endeavors to curtail the independence of the Federal Reserve.
In quest of substitutes
However, as apprehensions concerning the hazards of AI and the elevated expenses of the technology have intensified, Wall Street's allure has begun to diminish. The escalating share values of tech juggernauts, which have historically steered the market, are compelling investors to exercise greater selectivity — and numerous individuals are uncovering more compelling prospects beyond the borders of the United States.
A February survey of investment managers by Bank of America revealed that investors are transitioning from U.S. equities to emerging market equities at the most accelerated pace in five years.
“I’ve engaged in numerous discussions with our U.S. wealth management division this year,” stated Jerry Fowler, director of European equity and global derivatives strategy at UBS. “They are all contemplating increasing their international investments because upon year-end examination of foreign market performance in dollar terms, they realized: we are forfeiting opportunities.”
U.S. investors have channeled roughly $26 billion into emerging market stocks thus far this year, with South Korea spearheading the trend at $2.8 billion, succeeded by Brazil at $1.2 billion, according to LSEG/Lipper statistics.
One evident outcome of Trump’s strategies has been a 10% contraction in the dollar against a currency basket since January of the prior year. While this complicates foreign investment for Americans, dollar-denominated returns from markets with improved performance are also increasing.
The S&P 500 has appreciated by approximately 14% throughout the preceding 12 months. When expressed in dollars, Japan's Nikkei has surged by 43%, Europe's STOXX 600 has climbed by 26%, China's CSI 300 has risen by 23%, and South Korea's KOSPI has doubled.
Investors are also overestimating the swift advancement of AI giants such as Nvidia, Meta, and Microsoft, in conjunction with the risks linked to their exorbitant valuations. They are progressively seeking “value” in traditional industrial entities and defensive stocks, which are extensively represented in markets including Germany, the UK, Switzerland, and Japan.
Re-evaluation of worth
Laura Cooper, global investment strategist at Nuveen, pointed out that the shift on Wall Street — from technology and so-called “growth stocks” to “value” stocks — is unfolding on a worldwide scale.
“We are increasingly observing American investors assessing the global terrain from a value perspective,” she stated, highlighting the cyclical economic resurgence, principally in Europe and Japan.
European banking equities — a quintessential illustration of a cyclical sector that thrives on an accelerating economy — experienced a 67% increase last year and have augmented by an additional 4% since the commencement of 2026.
“When the valuation narrative converges with the economic growth narrative, we perceive this rotation among American investors as well,” Cooper added.
Notwithstanding this, US equities remain considerably more expensive than others. The S&P 500 trades at roughly 21.8 times anticipated earnings, whereas in Europe the corresponding figure is around 15, in Japan it stands at 17, and in China it is 13.5.
Kevin Toze, portfolio advisor at Carmignac, remarked that his team has witnessed an upswing in the influx of American capital into Europe since mid-2025.
LSEG/Lipper figures indicate that since Trump's inauguration last January, US investors have deployed nearly $7 billion into European equity assets – while during the initial four years of his preceding administration (2017-2021) the outflow from such instruments approximated $17 billion.
“Considering it over the long haul, this may signify the genesis of a substantial global realignment,” Toze concluded.