Wall Street Exodus? Why Big Money Is Quietly Fleeing the US Market
Institutional investors are starting to step back from the United States. Between Washington's mounting debt pile, shifting trade policies, and general unpredictability, the case for having a concentrated US portfolio is no longer a given. AllianceBernstein CEO Seth Bernstein put it bluntly: the pace of US borrowing is untenable. The dollar has already dropped nearly 9% this year, and a recent Bank of America fund manager survey showed the largest underweight in the greenback in almost 20 years. For some investors, it's no longer just about tariffsit's about whether the decades-long dominance of US markets is beginning to wobble.
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Meanwhile, Europe's looking more like a viable alternative. The Stoxx Europe 600 is up 9% this year, well ahead of the S&P 500's (SPY) modest gains. Neuberger Berman has already shifted 65% of its private equity co-investments to Europemore than double its previous range. Blackstone vice chair Tom Nides said the math is getting clearer: Shifting money to Europe is certainly not a bad bet. Germany's 1 trillion infrastructure and defense plan could add some fuel, especially as European governments project a steadier macro backdrop than Washington can currently offer. The continent still has its challenges, but for now, it's offering something the US isn'tpredictability.
Even long-time US investors are quietly pulling back. Caisse de depot et placement du Quebec, which had 40% of its portfolio in US assets, is moving more capital to the UK, France, and Germany. Tesla (NASDAQ:TSLA) and other American heavyweights may still anchor global portfoliosbut the question being asked across boardrooms is different now: are we overexposed? For the first time in years, investors are running that calculation with fresh eyes. And while no one's calling time on the US just yet, the idea of global rebalancing? It's not just talk anymore.
This article first appeared on GuruFocus.
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