Foreigners rebuff ‘Sell America’, buying a net $2 trillion in US assets in 2025

NEW YORK – Foreign purchases of US financial assets accelerated in 2025, led by demand for stocks and US Treasuries, marking a sharp rebuttal of the “Sell America” narrative that has become a regular feature of discussions among market participants.

Overseas investors bought a net US$1.55 trillion (S$2 trillion) of long-term US financial assets in 2025, data released by the Treasury Department on Feb 18 showed. That compares with net purchases of US$1.18 trillion in 2024. Of the total, US$658.5 billion went into equities and US$442.7 billion to Treasury notes and bonds.

US President Donald Trump’s regular threats of steep tariff hikes – deployed for reasons ranging from economic to geopolitical to national security – have triggered concerns that investors abroad will abandon US markets and the US dollar.

Amid Mr Trump’s pressure on Denmark over its island of Greenland, a Danish pension fund warned in January it was planning to exit its Treasuries position. Dutch fund Stichting Pensioenfonds ABP, Europe’s biggest, dramatically scaled back its exposure in 2025.

But Treasury Secretary Scott Bessent has regularly pushed back against the “Sell America” rhetoric, arguing that the administration’s economic policies enhance the US’ position as the top destination for global capital.

“Yes, there has been geopolitical instability as of late, and the sell-the-dollar trade has been popular as a result,” said Mr Andrew Hazlett, a foreign exchange trader at Monex.

But ultimately Treasuries make up a large share of sovereign debt holdings, he noted, adding: “I don’t really see a world where that changes.”

US dollar’s role

The US dollar’s depreciation in 2025 might have even encouraged some overseas managers to load up on US securities.

Mr Geoff Yu, senior macro strategist at BNY – one of the world’s largest custodians – said earlier in February that was what happened after the market gyrations spurred by Mr Trump’s “Liberation Day” tariff announcement in April 2025.

“Our data shows that cross-border investors took full advantage of the adjustment in dollar valuation to add to US equity exposure,” Mr Yu wrote in a note last week. “Although allocations are not as strong as during the ‘US exceptionalism’ period from 2023 to 2024, the cross-border ‘premium’ remains intact.”

The Treasury’s figures suggest many overseas managers were willing to increase their US holdings in 2025. Besides stocks and Treasuries, net purchases of corporate bonds totalled US$327.8 billion in 2025. Securities issued by Fannie Mae, Freddie Mac and other so-called agencies amounted to a net US$112.9 billion.

On a regional basis, Europe accounted for US$872.8 billion of the net inflow into long-term financial assets, defined as securities with maturities exceeding one year. The Cayman Islands recorded net purchases of US$277.2 billion, while Japan bought a net US$56 billion. Canada accounted for US$84.4 billion.

China sells

The Treasury cautions that identifying the ultimate origin of ownership can be challenging. Many of the largest net purchases came from locations known for tax advantages, such as the Cayman Islands and Guernsey, and for their custodial roles in global finance, including Britain and Belgium.

China was a notable net seller of US long-term financial assets, offloading US$208.6 billion. Its Treasury holdings ended the year at US$683.5 billion, the lowest level since 2008.

Chinese holdings may come under extra scrutiny after a Bloomberg report earlier in February showed that Beijing’s regulators had advised financial institutions to rein in their holdings of US Treasuries, citing concerns over concentration risks and market volatility.

In December alone, foreign holdings of Treasuries dropped by US$88.4 billion to US$9.27 trillion – the lowest level since October. Japan, the largest overseas owner of US government debt, saw its position decline by US$17.2 billion to US$1.19 trillion. Britain’s holdings fell by US$23 billion to US$866 billion. BLOOMBERG