Despite the dominance of U.S. stock markets in 2024 and 2025, a growing number of institutional investors are pulling capital out of U.S. equities, according to a new JPMorgan global investor survey. The move described as a “Sell America” trend is taking shape even as U.S. indexes like the S&P 500 and Nasdaq 100 maintain their market leadership.
The shift reflects portfolio repositioning rather than bearish sentiment, driven by global investors seeking better value, diversification, and rebalancing after strong U.S. outperformance.
According to JPMorgan’s Global Markets Strategy survey (source), nearly 70% of institutional investors are underweight U.S. equities in Q2 2025 the highest such figure in five years.
Survey Highlights: Institutions Shift from U.S. Equities
The May 2025 survey by JPMorgan Chase & Co. included over 300 institutional investors managing trillions in assets. Their responses revealed a significant sentiment shift:
- 69% are underweight U.S. equities
- 19% expect to reduce U.S. exposure further this year
- Europe, India, and parts of Latin America are preferred destinations
- Technology stocks are still favored, but many investors are looking for regional alternatives
JPMorgan’s analysts note that while U.S. fundamentals remain strong, the valuation premium and concentration risk are key drivers behind this shift.
Reasons Behind the U.S. Equity Sell-Off
While a market exodus may sound bearish, it is more a reflection of strategic reallocation. Here are the top three reasons investors are selling U.S. stocks:
1. Overvaluation in Large-Cap U.S. Stocks
Mega-cap U.S. tech firms such as Microsoft, Nvidia, Apple, and Alphabet have powered the market’s gains. However, the S&P 500’s forward P/E is now over 21x, compared to the historical average of 16.5x.
“Valuations are simply too high. We’re not calling a crash we’re just repositioning portfolios,” said one fund manager quoted in Bloomberg.
2. Regional Diversification and Emerging Opportunities
Investors are increasingly drawn to markets like India, Brazil, and Europe, where growth is picking up, but valuations are lower. Countries with expanding middle classes and robust GDP forecasts are attracting more attention.
3. Hedging Against U.S. Political and Currency Risk
With the 2024 U.S. elections behind and geopolitical tensions still looming, some investors are choosing to de-risk by reallocating to less politically volatile markets. In addition, the strong U.S. dollar has made currency-adjusted returns less attractive for foreign investors.
How the U.S. Still Leads Despite Outflows
Despite this selling trend, U.S. markets continue to lead globally in performance and innovation:
- The S&P 500 has returned over 14% YTD
- U.S. companies dominate global R&D and AI investment
- Liquidity and corporate transparency remain unmatched
Analysts at JPMorgan caution that the “Sell America” trend should not be viewed as a long-term rejection of U.S. markets but rather a short- to medium-term rotation in global capital.
Global Market Comparison Table
Below is a comparison of key market data across major regions as of Q2 2025:
| Metric | U.S. (S&P 500) | Europe (Stoxx 600) | India (Nifty 50) | Brazil (Bovespa) |
|---|---|---|---|---|
| YTD Return (2025) | +14.2% | +7.4% | +9.8% | +6.1% |
| Forward P/E Ratio | 21.3x | 14.2x | 18.9x | 11.5x |
| Market Cap Share (Global) | 61% | 16% | 3% | 2% |
| GDP Growth Forecast (2025) | 2.1% | 1.2% | 6.5% | 2.8% |
| Institutional Inflows (Q2) | ↓ 3.4% | ↑ 4.1% | ↑ 6.7% | ↑ 2.9% |
Source: Bloomberg, JPMorgan Research
Implications for Investor
This global rotation could bring new volatility and valuation resets in select U.S. sectors. However, it also creates opportunities:
- Retail investors may find better entry points in large-cap U.S. stocks
- ETF and fund managers can rebalance exposure across undervalued global markets
- Currency hedging and regional analysis will become more critical in 2025 portfolio construction
JPMorgan recommends a balanced, regionally diversified approach, with attention to domestic fundamentals and macroeconomic tailwinds.
To read JPMorgan’s full investment outlook, visit their Global Insights portal.
