Wealth managers face mounting pressure to trim concentrated us dollar exposure
European institutions that helped fuel Wall Street’s rally are now quietly asking how much US risk they can afford to keep.
US Commerce Secretary Howard Lutnick told executives in Davos that the Trump administration sees globalisation as “a failed policy” that left America behind, according to Bloomberg.
US President Donald Trump also predicted the US stock market would double from records he openly credits to his own policies.
For investors, that mix of anti‑globalisation rhetoric and market triumphalism is colliding with a simple reality: foreign capital, especially from Europe, has been a key pillar of US asset prices.
According to Bloomberg, European investors hold about US$10.4tn in US stocks and account for 49 percent of all US equities owned by foreigners.
Scotiabank strategist Hugo Ste‑Marie wrote that if diversification away from the US accelerates, it could weigh on US equities, bonds and the US dollar over time.
Some of the biggest institutions say clients are already pushing in that direction.
Vincent Mortier, chief investment officer at Amundi SA, which Bloomberg describes as Europe’s largest asset manager with €2.3tn (about US$2.7tn) in assets, said “we are seeing more clients wanting to diversify away from the US.”
He told Bloomberg the trend, which began in April 2025, has “somewhat accelerated this week.”
He called any disentanglement a “long and complex process” as clients reconsider benchmarks and US dollar hedging.
Performance now gives them cover to do it.
Last year the Stoxx 600 gained 32 percent in US dollar terms, Japan’s Topix rose 23 percent, South Korea’s Kospi jumped 80 percent, while the main US benchmark climbed 16 percent.
Canada’s S&P/TSX Composite advanced 28 percent, beating the S&P 500 by the widest margin in 20 years.
Michael O’Rourke, chief market strategist at JonesTrading, told Bloomberg that if he were European, he would say “we have US exposure” and that “there’s more opportunities elsewhere.”
Northern European pension funds and insurers are making similar calculations on the fixed income side.
Pension leaders and industry officials from Finland, Sweden and Denmark told Reuters that US policy uncertainty and debt levels have raised the risk premium on the US dollar, Treasuries, and US stocks.
Two Nordic pension funds, Sweden’s Alecta and Denmark’s AkademikerPension, said they had sold or were in the process of selling their US Treasuries, Reuters reported.
Alecta cited higher risk in US Treasuries and the dollar, while AkademikerPension blamed weak US government finances and said it planned to fully divest by the end of the month.
Both stressed these moves were not political gestures over tensions about Greenland.
Seattle‑based Russell Investments, which advises retirement schemes with US$1.6tn in assets and manages US$636bn directly, is hearing the same questions.
Van Luu, its global head of solutions strategy for fixed income and foreign exchange, told Reuters they are “having a lot of discussions” on whether it is time to tilt away from US assets, and said about 50 percent of clients, especially in Northern Europe and the Netherlands, are considering action.
Industry bodies frame this as risk management, not activism.
Tom Vile Jensen, deputy director of Insurance and Pensions Denmark, said “all of this turmoil is raising some questions about how exposed you should be to the US... that is what our members are professionally assessing,” and added there is “certainly no weaponisation of capital.”
Annika Ekman, EVP, Investments at Finland’s Ilmarinen, which manages just over €65bn (about US$76.1bn), told Reuters that the US “remains an investable market” but its risk premium “has continued to rise.”
Finnish pension provider Veritas is sticking to its mandates but sees US policy unpredictability as a dollar risk, CIO Laura Wickstrom said to Reuters, noting that the higher the unpredictability, the more difficult the environment.
The shift is not yet a stampede. Bloomberg reported that daily ETF flow data show “little change” so far in foreign demand for US equity funds, according to JPMorgan strategists led by Nikolaos Panigirtzoglou, though they cautioned that could change in coming months.
Still, several strategists argue this is not an environment to be heavily concentrated in one market or one currency.
“This is really an environment where you don’t want to be all exposed to US equities or US assets, especially not the dollar,” said Mathieu Racheter, head of equity strategy at Julius Baer & Co., which manages 520bn Swiss francs (about US$662bn), as reported by Bloomberg.
Lars Christensen, CEO of advisory firm Paice, summed up the institutional mood on X, saying it is “not a question about Europe standing up to the US.” He said it is instead about “being prudent with our investments — about reducing risks,” according to Bloomberg.
