June 7, 2025

Growing concerns over U.S. trade policies and rising debt levels are prompting major global institutional investors to pull funds out of the U.S. market and shift investments to other regions, the Financial Times reported on Thursday.

The article highlights how the U.S. government's erratic trade policies have disrupted global markets, contributing to a weakening of the U.S. dollar and the underperformance of U.S. capital markets this year. Additionally, the "Big and Beautiful" tax reform pushed by the Trump administration is expected to reduce U.S. tax revenues by $3.7 trillion and increase the deficit by $2.4 trillion over the next decade, according to the Congressional Budget Office. These factors are causing institutional investors to reassess their U.S. holdings.

Last month, Bank of America's Global Fund Manager Survey showed that allocations to U.S. assets had reached their lowest levels in nearly 20 years, signaling a significant shift in investor sentiment.

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