The “Buy American” trade just hit a wall.
According to the latest LSEG Lipper data, global investors are aggressively rotating out of expensive US mega-caps and into international value. For the week ended Feb 11, European equity funds secured a massive $17.53 billion inflow—the highest weekly figure since at least 2022—while Asian funds drew in $6.28 billion.
📉 THE US TECH EXIT:
- The Outflow: US equity funds saw $1.42 billion in net outflows, the first weekly net sales in three weeks.
- The Trigger: Renewed anxiety over “stretched valuations” and AI disruption risks in software/services drove the Nasdaq Composite down 2.03% on Thursday.
- The Shift: Investors are locking in gains from the AI rally and redeploying capital where multiples are lower.
🛡️ BOND SAFETY: The “Risk-Off” sentiment isn’t just geographical; it’s asset class-based.
- Global Bond Funds: Attracted $21.09 billion (6th straight week of inflows).
- Short-Term Bonds: Saw $4.87 billion in inflows, the biggest since mid-December.
- ** Emerging Markets:** Equity funds saw $8.52 billion pumped in (8th straight week of buying).
💡 ANALYST TAKEAWAY: This is the “rebalancing” everyone has been waiting for. After years of US exceptionalism, the valuation gap has become too wide to ignore. With Europe seeing its best inflows in years and EM equity streaks extending to 8 weeks, the smart money is betting that 2026 will be the year of International Outperformance.
👇 Asset Allocators: Is this a tactical rotation or the start of a multi-year bear market for US dominance?