Global Investors Flock to Non-U.S. Equity Funds Amid Trump’s Return
Investors Shift Focus to Non-U.S. Equities Amid Trump’s Return
Following Donald Trump's return to the U.S. presidency in January 2025, global investors—especially those in Europe and Asia—have significantly reallocated capital into equity funds that exclude the U.S. market. From December 2024 to April 2025, so-called “world ex-US” mutual and exchange-traded funds (ETFs) attracted around $2.5 billion in new assets, swiftly recovering losses accumulated between 2022 and 2024.
Investors Eye Global Opportunities Amid U.S. Political Uncertainty
Investors are increasingly withdrawing from U.S. equity funds, primarily driven by concerns surrounding Donald Trump's return to power and the potential instability of his future trade and economic policies. This shift is prompting a significant reallocation of capital towards global markets, with "world ex-US" funds experiencing a surge in popularity.
Why the Exodus from U.S. Equities?
The apprehension among investors stems from fears of renewed protectionist measures and market volatility under a Trump administration. Many are seeking more stable and diversified opportunities elsewhere, viewing the U.S. as a riskier investment environment due to potential trade wars, high tariffs, and fiscal unpredictability.
"World Ex-US" Funds Attract New Investment
Funds specifically designed to invest in global equities, excluding the U.S., are attracting substantial inflows. These "world ex-US" mutual and exchange-traded funds (ETFs) have seen approximately $2.5 billion in new assets over the past three months.
Major Players Capitalizing on the Shift
Investment behemoths such as BlackRock, DWS, and Amundi are directly benefiting from this trend. They are launching or expanding their offerings of ETFs focused on non-U.S. markets to meet growing demand.
Non-U.S. Markets Outperform in 2025
Since Trump's return in January 2025, non-U.S. markets have generally outperformed the U.S. For instance, Germany's DAX index has climbed by 10%, while the S&P 500 has dropped by 6% during the same timeframe.
Europe's Role in the Investment Trend
European investors are particularly active in this rebalancing, favoring regional and international markets. Analysts have even referred to this as a "patriotic rebalancing."
Emerging Markets Also Benefiting
Capital is also flowing into emerging markets, with India and China seeing strong investor interest. MSCI India and MSCI China both recorded gains of about 7% in March 2025, signaling confidence in their growth outlook.
Adapting Global Investment Strategies
This trend points to a longer-term shift in portfolio strategy. Global investors are increasingly looking beyond U.S. markets, prompting asset managers to launch specialized products focused on Europe, Asia, and emerging markets.
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