Global markets’ pecking order could be shifting.
That’s the fear being voiced by more investors in recent months as doubts swirl around American exceptionalism — the idea that investors can expect better returns on US assets relative to international markets.
The US’s dominance in global markets has been the historical precedent, but talk about America losing its edge has been rising over the past year as investors take stock of risks like higher inflation, more debt, and increasing geopolitical tensions.
More investors also appear to be turning their attention to other areas around the world, particularly as the US stocks battle continued selling pressure.
Here are two stats that illustrate how the US could already be losing its edge.
1. The US stock market is seeing its worst start to the year in decades
The S&P 500‘s year-to-date performance is lagging behind the MSCI World Index by the most in at least 30 years, the bank said, citing its historical analysis since 1995.
The US has already been lagging global markets for the past year, hedge fund manager Rob Citrone noted when speaking to CNBC about his outlook for US markets this week. In the year leading up to last Friday, he said that the gains in dollar-based assets have been the weakest when compared to 19 other markets around the world.
“The US is 20th out of 20,” Citrone said, adding that gains in the US market fell around 30% short of the gains in emerging markets in the last year. “That’s a significant difference.”
2. Global investors are rotating out of US stocks at a record pace
Bank of America Global Fund Manager Survey
Investors around the world are swapping their holdings of US-based stocks for emerging markets at the fastest pace since 2021, according to Bank of America’s survey of global fund managers in February.
On average, global investors reduced their position in US stocks by around 20 percentage points compared to their position the prior month. US stocks were the category that investors shifted away from the most, while the eurozone and emerging markets were among the top five areas where investors increased their positioning.
Talk about “Sell America,” or investors shifting away from US assets, has picked up in recent months as markets eye potential headwinds, like hotter inflation and higher deficits in the US.
Famed fixed-income investor Jeff Gundlach said last month that he was steering clear of the US entirely, and that he believed “all” investors should have exposure to non-US stocks in non-dollar currency.
Ron Temple, the chief market strategist for Lazard’s advisory and asset management business, said in December that 2025 marked the last year of American exceptionalism, as he expected investors to continue shifting away from the US due to concerns about higher inflation and debt levels.
Citrone added that he thinks the US market will continue to underperform the rest of the world, and that he was short US assets while betting on other markets, like Mexico.
“Most people are going to move some money from the US,” he told CNBC earlier this week.
