The US is seeing a mass exodus of global investment as asset owners fear the impact of the current administration’s trade policies.
Morningstar’s Voice of the Asset Owner survey, which covers more than 500 asset owners representing combined assets under management of USD19.1 trillion, reveals 40 per cent have already decreased or are planning to decrease their allocations to US investments.
Asset owners say US dollar volatility, tariffs in markets outside of China and regulatory uncertainty in the US are driving their decision to reduce allocations.
More than three quarters (76 per cent) 7of asset owners view the trade disputes, including the tariffs levied by the US, as material to investment decision-making. This figure rose to 94 per cent when looking at Chinese asset owners.
The survey also shows that US asset owners look increasingly isolated on their ESG stance.
Twenty per cent of asset owners report that ESG considerations are applied to more than 75 per cent of their AUM; an increase of 8 percentage points since last year. Those reporting that 100 per cent of their AUM is invested through an ESG lens has reached 10 per cent a 5-percentage-point increase since last year, and up 233 per cent since 2022.
However, the percentage of total AUM to which US investors apply ESG considerations has stuck stubbornly at 37 per cent since 2024, while in Europe it has reached 48 per cent and in APAC 43 per cent.
More than half (58 per cent) of all asset owners surveyed believe ESG has become ‘more’ or ‘much more’ material in the past five years. However, that figure falls to 38 per cent of North American asset owners and compares to 67 per cent in APAC and 60 per cent in Europe who say ESG factors have become more material.
Paul Schutzman, Head of Solutions for Institutional Investors at Morningstar, says asset owners have faced challenges in 2025 which evoke questions about their asset allocations, perspectives on ESG policies and the most effective means of responding to stakeholders.
“An investor’s place in the world and the environment they’re operating in clearly has an impact on their perspective. Apart from those in the US, most asset owners globally view ESG as becoming more material and are looking to regulators to help push toward more standardised data. On the other hand, in this year’s survey, we see that US investors view ESG issues as becoming less material and think that the regulatory rollback is a welcome reduction of bureaucratic burden,” he says.
Schutzman, adds that while asset owners represent just one segment of the global investment ecosystem, they play a pivotal role in shaping market behaviour through their policies and decisions.
“Their influence extends across the entire investment value chain, guiding the actions of other participants. Therefore, it’s essential that investors of all types stay informed on institutional investor perspectives and trends so they can identify emerging opportunities, align with best practices, and meet evolving stakeholder expectations.”
