International investors are actively reallocating capital from the US market to European assets. According to LSEG/Lipper, US investors have withdrawn approximately $75 billion from US equities over the past six months, $52 billion of which has been withdrawn since the beginning of 2026 alone. This represents the largest outflow in the first months of a year since at least 2010. At the same time, US funds have shifted nearly $7 billion into European equities since Donald Trump’s inauguration in 2025, compared to an outflow of $17 billion during his entire first presidential term.
Experts note an acceleration in capital flows to Europe starting in the second half of 2025. Kevin Thozet, portfolio advisor at Carmignac, emphasizes that American capital flows into European assets have sharply increased since mid-last year. Bank of America surveys confirm similar trends: the rotation from American stocks to Europe, Japan, and emerging markets is occurring at the fastest pace in five years.
The main reasons for the reallocation are:
High valuations in the US market and concentration in the technology sector, raising fears of a correction;
Significantly more attractive (lower) valuations of European stocks compared to the USA;
More aggressive monetary easing by the ECB compared to the Fed;
Increased government spending in Europe (especially in Germany – the largest fiscal stimulus package in decades);
Expectations of a strong recovery in European banks, industrial sectors, and companies focused on domestic demand;
A weakening US dollar, making foreign assets more profitable for US investors.
Investors from China, the Middle East, and the Asia-Pacific region are also increasing their investments in European assets, seeking diversification, Euroclear CEO Valérie Urbain previously reported.