MUNICH (dpa-AFX) - For the first time in many years, European stock markets have outpaced their U.S. counterparts in the first half of 2025--thanks in large part to U.S. President Donald Trump. According to investment managers and economists, international investors have withdrawn billions from U.S. markets and shifted their capital to Europe. The main driver behind this capital flight from the United States, they say, are Trump's tariff threats and unpredictable policy shifts. As a result, global money flows have, at least for now, reversed direction. In previous years, vast sums had poured into the U.S.
The primary European beneficiaries are the stock exchanges in Germany, Spain, and Italy, each posting double-digit gains. Despite recent losses, Germany's DAX has risen by about 17 percent since the start of the year. In contrast, U.S. stock markets have seen only modest increases or have remained largely flat.
Investor Funds Flow Back to Europe
"Numerous indicators point to a significant movement of investor funds from the U.S. to Europe, and also to other regions such as Japan," says Ludovic Subran, Chief Investment Officer at Munich-based Allianz, who oversees the company's investment portfolio. With nearly €2.5 trillion in assets under management, the DAX-listed Munich group ranks among the world's investment heavyweights.
For years, global capital had streamed into U.S. financial markets. "That has now changed," says Vincenzo Vedda, Global Chief Investment Officer at DWS, the asset management arm of Deutsche Bank. "Where fund managers had strongly overweighted the U.S. at the end of 2024, there is now a clear underweighting."
