Global investors shifted sharply out of U.S. equities in July, channeling $13.6 billion into global ex-US equity funds—the largest monthly inflow in four-and-a-half years, according to LSEG Lipper. U.S.-focused equity funds, by contrast, recorded $6.3 billion in redemptions, marking a third consecutive month of outflows. Asset managers cite a cocktail of factors driving the rotation: concern about the durability of U.S. growth, stretched stock valuations and a 10% slide in the dollar that enhances overseas returns. The forward price-to-earnings ratio for the MSCI U.S. index stands at 22.6, well above the 14-times multiples for both MSCI Asia and MSCI Europe. Uncertainty over President Donald Trump’s trade policies has further cooled appetite for American assets, portfolio strategists said. Stronger relative performance abroad has reinforced the move. Year-to-date, the MSCI Europe index has risen 19% and MSCI Asia Pacific ex-Japan 14%, outpacing the S&P 500’s 7.2% gain. Emerging-market portfolios notched their second-biggest monthly inflow in four years, International Institute of Finance data show, while European-domiciled ETFs have already gathered a record €39.4 billion in 2025, with defence-focused funds drawing particular interest.