Reference News Network, February 24 report: According to Reuters, on February 20, as returns from U.S. tech giants gradually declined and more promising overseas markets became increasingly attractive, U.S. investors are exiting the domestic stock market at the fastest pace in at least 16 years.

According to data from London Stock Exchange Group (LSEG)/Lipper, U.S. domestic investors have withdrawn about $75 billion from U.S. equity products over the past six months, of which $52 billion flowed out since early 2026, setting a record for the highest outflow in the first eight weeks of the year since 2010.

This shift in capital flows comes as the dollar weakens against other currencies, which would normally increase the cost for U.S. investors to purchase foreign assets. This phenomenon strongly indicates that the diversification strategy of some international investors who reduced their U.S. asset holdings over the past year is now gaining acceptance among U.S. investors.

Since the end of the 2009 global financial crisis, the "buy America" investment strategy has brought substantial profits to both domestic and international investors, thanks to strong economic and earnings growth, as well as the excess returns brought by the dominance of technology companies in the U.S. stock market.

However, as concerns about the potential risks and related costs of artificial intelligence intensify, the appeal of Wall Street stocks has weakened. This is making investors more discerning, with many finding more attractive opportunities in other markets.

A February 2026 survey of fund managers by Bank of America showed that the speed at which investors are shifting from the U.S. stock market to emerging market stocks is the fastest in five years.

Gerry Fowler, head of European equity strategies and global derivatives strategies at UBS, said: "This year, I've had multiple discussions with our wealth management division in the U.S. They are all talking about increasing overseas investments because at the end of last year, when they saw the performance of overseas markets in U.S. dollars, they would be amazed and say 'Wow, I missed out too much.'"

Data from LSEG/Lipper shows that so far this year, U.S. investors have poured about $2.6 billion into emerging market stock markets, with South Korea being the largest single country destination, attracting $2.8 billion; Brazil followed with $1.2 billion.

One clear result of Trump's policies is that the dollar has depreciated 10% against a basket of currencies since last January. Although this is unfavorable for U.S. investors seeking overseas opportunities, the dividends from better-performing overseas markets will thus be worth more in U.S. dollars.

Over the past 12 months, the S&P 500 index has risen by about 14%. In U.S. dollar terms, the Tokyo Nikkei index rose 43%, the European Stoxx 600 index surged 26%, the Shanghai CSI 300 index increased by more than 20%, and the South Korean Composite Stock Price Index doubled.

Investors are also re-evaluating the risks associated with the seemingly unstoppable rise and sky-high valuations of AI giants such as NVIDIA, Meta Platforms, and Microsoft. They are seeking "value" in traditional industrial companies and defensive stocks, which make up a significant portion of certain overseas stock markets such as Germany, the UK, Switzerland, or Japan.

Laura Cooper, global investment strategist at Newpoint, said that the rotation of capital from tech stocks and other so-called growth stocks to value stocks is taking place globally.

She said: "We are increasingly seeing U.S. investors assessing the global landscape from a valuation perspective."

European bank stocks, as typical growth-sensitive cyclical stocks, surged 67% last year and rose another 4% since early 2026.

Cooper added: "When valuation logic and growth logic overlap, we see this kind of rotation happening among U.S. investors as well."

Kevin Touse, portfolio advisor at Caminag Management, said his team has observed that the flow of U.S. capital into Europe has accelerated since around mid-2025.

Data from LSEG/Lipper shows that since last January, when Trump took office, U.S. domestic investors have poured nearly $7 billion into European stock products; during Trump's first presidential term from 2017 to 2021, the outflows were approximately $17 billion over four years.

Touse said: "If we look at it from a long-term perspective, this may be an example of the global asset rotation." (Translated by Hu Wei)

Original: toutiao.com/article/7610372120886936083/

Statement: This article represents the views of the author(s) alone.