At the same time, the US’s net international investment position, historically propelled by strong foreign appetite for US stocks and bonds, may be showing signs of reversing, they add in a new research blog post, and this could potentially prolong the weakness in the US dollar and other US assets.
A continued shift towards a “tripolar” world and recent outperformance of non-US stocks make diversification even more compelling now than after the global financial crisis (GFC), say Anil Rao and Rohit Gupta of MSCI Research.
A rare double-digit performance gap favouring non-US equities over their US counterparts opened up in early 2025, accompanied by a shift in fund flows away from the US and into Europe, Asia and emerging markets (EM), note Rao and Gupta.
