Nothing says “I hate your politics but love your profits” quite like foreign investors right now. Trade wars were expected to scare off global money — instead, they’ve sparked the biggest wave of overseas buying in US market history.

Ambivalence pays: Even as leaders spar over tariffs and global funds voice their discontent, billions keep pouring into American equities. In Q2 alone, foreign purchases hit a record $290.7B, lifting international allocations to nearly 32% of all foreign US investments — the highest share since 1968. Foreign holdings of US equities are on track to climb $2.8T this year, demonstrating sustained trade appetite despite ongoing trade friction.

• Global investors now own ~$18T in US stocks, roughly 30% of the $60T American market — the largest foreign presence since records began in 1945.
• McKinsey noted direct investment into the US and Canada up 89% since 2022, led mostly by wealthy nations rather than emerging markets.

Love The Player, Hedge The Game

International investors have discovered they can have their cake and eat it too by embracing a strategy known as “Hedge America.” The approach involves loading up on US stocks and bonds while simultaneously using derivatives to shield against currency declines. That dynamic has kept US markets hitting new highs even as the greenback sinks to its weakest level since 2022.

• Starting mid-year, inflows into dollar-hedged ETFs buying US assets surpassed unhedged funds for the first time in a decade.
• Hedging could climb to $1T as overseas holders of more than $30T in US equities and bonds move back toward historical risk levels.

Returns come first: While Trump’s trade policies were designed to reduce foreign reliance on American markets, they’ve actually made US assets more attractive. Fidelity’s Salman Ahmed called the momentum undeniable but cautioned there are “shades of 2000” in the AI-driven rally. Still, Foresight Group’s Mayank Markanday argues, “It’s definitely not the time to cut your US exposure and swing heavily towards the rest-of-the-world trade.” After all, nothing polls higher than profits.