Big-name funds are pulling back from the US, rebalancing portfolios

Big-name funds are pulling back from the US, rebalancing portfolios toward Europe and other overseas markets as the country’s political and economic risks pile up.

This new rotation is driven by rising US debt, unstable trade policy, and a weakening dollar—factors that now have even the most committed American investors looking elsewhere.

According to Financial Times, several major asset managers have already begun reducing their positions in US assets and redirecting money abroad.

President Donald Trump’s latest round of tariffs, announced without warning, caused a sharp response in global markets and sent the dollar tumbling to a three-year low.

As the president keeps targeting foreign partners with protectionist policies, confidence in American stability is being tested across institutional investment desks.

Executives voice concerns over the us outlook

Seth Bernstein, CEO of the $780 billion AllianceBernstein, said it plainly: “People need to rethink their exposure to the US.” He warned that the country’s deficit—expected to balloon by $2.4 trillion over the next decade because of Trump’s tax bill—is no longer something investors can ignore.

“It is untenable for the United States to continue borrowing at the pace it’s borrowing,” Seth said. He added that unpredictability in US trade policy should force a hard look at portfolio concentration.

A senior figure at a leading American private equity firm described Trump’s declaration of a “liberation day”—the day sweeping tariffs were unveiled—as “a wake-up call to a lot of people that they were overweight the US.” The message hit hard. Investors began to reconsider their exposure, not out of preference, but because conditions demanded it.

One of the most notable actions came from Caisse de dépôt et placement du Québec, Canada’s second-largest pension fund. The company said it was actively cutting its US holdings, which currently make up 40% of its portfolio.