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(Bloomberg) -- Amundi SA says it’s seeing a major reallocation as clients pull away from the US and pile into European funds in response to the market upheaval triggered by tariff wars.
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Investment clients have “massively repositioned” their portfolios toward European equities and government bond exchange-traded-funds, a spokesperson for Europe’s biggest asset manager told Bloomberg. The direction of flows reflects a “broader market repositioning” on the back of tariff announcements, the person said.
The comments match flow data provided by Morningstar Direct, which show a general flight from US funds this month. In the first two weeks of April alone, as markets digested President Donald Trump’s announcements on tariffs, US-focused funds managed by Amundi, UBS Group AG and State Street Corp. saw a combined €3.9 billion ($4.5 billion) in client outflows, according to Morningstar data based on equity ETFs.
Over the same period, European equity funds managed by BlackRock Inc.’s iShares brand, Amundi and UBS were the biggest gainers, adding a combined €2.4 billion.
It’s the latest example of the “sell-America” sentiment gripping markets, as even investors once seen as bullish on US stocks sound the alarm. Investors are having to contend with the fallout of Trump’s ongoing tariff war, as well as the chilling effect of his threats to dismiss Federal Reserve Chairman Jerome Powell.
The big shift in capital flows out of the US and into Europe is leading to a “normalization of valuations,” according to Stefan Hoops, the chief executive officer of Deutsche Bank AG’s investment arm, DWS.
“People are much less bearish Europe, and less bullish US,” Hoops said in an interview. “There was probably an exaggeration in terms of bullishness on the US and bearishness on Europe, and that is reversing to some extent.”
Funds domiciled in Germany and France, which attract mostly domestic clients, have seen a particularly sharp influx of capital in recent weeks, according to Morningstar.
“As the two largest economies in Europe, both Germany and France are particularly exposed to US tariffs,” said Kenneth Lamont, principal in Morningstar’s manager research department. With that in mind, flow data indicates there’s “some ‘patriotic’ rebalancing of capital to Europe,” he said.