A growing number of global investors reduces their exposure to the US stock market, referring to a combination of high ratings, political instability and concerns about American foreign policy.
For some, a recent comment from Donald Trump who refers to Canada as the '51st state' was the last drop.
“It was the dagger in the heart,” said Keith Moffat, an investor based in the Netherlands with Canadian and Irish citizenship to WSJ.
Moffat, who once had 90 percent of his portfolio in US shares, said that he has sold all his American companies in recent weeks and rejected his funds to international stock market funds (ETFs) and European defense shares.
“Why would we keep our money in a market that becomes more unpredictable every day?” Asked Moffat.
The shift comes as markets outside the US, especially those in Europe and Asia, perform better than expectations at the beginning of this year.
The S&P 500 has fallen 3.6% this year so far, while the Europa Stoxx 600 has risen by 8.3%.
The Dax of Germany has risen almost 15%, partly stimulated by a tax injection of € 1 trillion focused on defense and economic incentive.
While some American investors hesitate to look abroad, referring to unfamiliarity with foreign markets, the shift is gaining strength. Shown, traders work on the floor at the New York Stock Exchange on Friday
Investors say that the market movement is not only about returns.
Moffat said that Trump's comments characterized Canada as the '51st state' that made many international investors angry.
'There are many Europeans with money that are upset about what is happening in the US. Why should we post our money there? '
The market reaction reflects a broader unrest with American policy.
President Trump's planned mutual tariff regime, who will come into effect on 2 April, and his 'America First' foreign agenda feeds the fear of rising global trading tensions and weakened transatlantic alliances.
“This is not a small redistribution. It is a sentiment shift, “said Lia Holmgren, a Miami -based trader originally from Slovakia who advises retail investors.
Holmgren said that in February she moved some of her short -term assets from the American markets to European defense companies.
'Everyone invests in US shares – it is where the best companies are. But the ratings are insane. What is the future of those companies? '
For some, a recent comment from President Trump who refers to Canada as the '51st state' was the last drop. Trump is seen next to the former Canadian Prime Minister Justin Trudeau
US shares are still acting with a premium compared to most international markets.
The price-win ratio for the S&P 500 is 24.6, compared to 18.7 for the Stoxx Europe 600 and younger than 13 for Hang Seng Index from Hong Kong, according to Dow Jones data.
Morningstar reports that investors have added more than $ 2 billion net in January and February to ETFs established in the US that mainly invest in European shares.
It is a grim reversal of the second half of 2024, when the same funds saw $ 8.5 billion in net outflows.
Some investors also mention personally and geopolitric risk in their decision to shift portfolios.
Peter Stern, a 41-year-old American who lives and worked in Germany for a technology company established in the US, said that he reduced his exposure to the US about the fear of financial uncertainty linked to diplomatic tension.
“I pass on euros, I make euros and all my money is stuck in the US,” Stern said.
“I no longer feel safe and leave my money in the US – not everything.”
Stern said he started converting his American bond companies into European shares, despite tax complications.
Like others, he is primarily focused on defense-related shares, which have won a grip throughout Europe as NATO-Uitgewelde countries increase military expenditures.
While some American investors hesitate to look abroad, referring to unfamiliarity with foreign markets, the shift is gaining strength.
This screenshot by Donald Trump's Truth Social Account shows an AI-generated image of President Trump that stands next to a Canadian flag
“There are opportunities elsewhere,” said Thomas Cooper, a 34-year-old entrepreneur in Ohio who acts daily.
Although he has not yet drawn his money, he is careful. “I don't blame anyone. I see the all-time highlights abroad. '
Despite the pressure, some investors remain committed to the American markets in the long term.
Andrew Barnett, based in Queensland, Australia, has cut his American companies in two, but did not completely leave.
“You have 27 countries in the EU,” he said. 'You have 27 different cultures and languages ​​and retirement ages.
'I think the US will always perform better than Europe. But during certain periods, such as now, we will see small opportunities.
For now, market guards are braced for what will come next.
American economic data that is the coming week due to producer prices, sustainable goods assignments and consumer sentiment, investor confidence can be stable or can deepen the exodus.
