Six months in, 2025’s been — how should I put this? — interesting, to employ a polite euphemism for what some observers would be more inclined to describe as chaos.

One big “surprise” so far is meaningful underperformance for US assets, and by “meaningful” I mean anomalous. As detailed in the latest Weekly, US equities just underperformed global peers by the most for any half since the financial crisis.

As for Treasurys… don’t get me started. Let me put it this way: Even if were a fan or a friend of Donald Trump’s, I wouldn’t loan him any money.

It’s still far too early to say whether Trump’s penchant for capriciousness — of which he’s quite proud, by the way — is in fact risking capital flight. I broached that subject for the umpteenth time in “A ‘Pennsylvania Plan’ To Cope With America’s ‘Explosive Debt’.” It’s fair to suggest the administration’s willingness to drop the proposed “revenge tax” from Trump’s budget bill was in part a function of capital flight concerns, although The White House would surely say otherwise.

In the context of the above —  i.e., in light of the by now vociferous debate around Trump’s policies and the appeal of US assets — it’s worth taking stock (no pun intended) of equity flow trends at mid-year.

I’ve used the figure below on several occasions and while I realize it doesn’t look especially remarkable at first glance, it in fact illustrates a meaningful shift.

Consider this: In the eight weeks to February 19, cumulative flows to Europe-focused equity funds were just $4.6 billion. As of now, they’re $46 billion — so, 10x. By contrast, cumulative flows to US-focused funds in the week to February 19 were already $88 billion. At the end of H1, they’re $165 billion — so, just 2x.

I should also mention that the $37 billion inflow to US stocks in the week to June 18 likely had more to do with June 20’s quadruple witching than it did with the Israel-Iran conflict, which some suggested might’ve engendered a bid for “safe” US shares.

Indeed, there was a similarly-large inflow ($34 billion) just prior to H1’s other quad witching (in March). You can see those inflows clearly in the figure below — they’re the two largest of the year for US equity funds. In the week to June 25, US equities returned to outflows, shedding nearly $5 billion.

As the chart sub-header notes, US-focused ETFs and mutual funds have seen net outflows in nine of the last 11 weeks. And in 11 of the last 14. And in 13 of 27 weeks this year. By contrast, funds focused on non-equities have enjoyed net inflows in 18 of 27 weeks so far.

It’s easy enough to look at the aggregates and claim nothing’s amiss here. Or even that US equities are still dominant. For example, the $164.8 billion YTD haul for US funds is 51% of all global equity inflows, and 52% of YTD inflows to DM equity funds.

But, as I’ve put it on any number of occasions lately, it seems a bit disingenuous to ignore the trends outlined above in favor of the aggregates, particularly considering the extent to which US equity funds are prone to the occasional massive influx.

My own contention is that US assets are out of favor relative to the beginning of the year. Not exactly a groundbreaking observation, I realize, but perhaps not as trite as it sounds.

Recall that “US exceptionalism” was so consensus at the beginning of the year that nearly six in 10 portfolio managers polled by Goldman at a strategy conference in London expected US shares to be the best-performing equity market in 2025. That was up 26ppt (!) from 2024, and a mile beyond any expressed preference for US shares recorded by the same survey going back to 2018.

At the time, I asked, “Is The 2025 ‘Buy America’ Credo Too Consensus To Be Right?” As it turns out, the answer was an emphatic “yes.”

Still, the above-mentioned $165 billion of YTD inflows does put US equity funds on track for their third-largest annual haul ever. I’ll leave it to readers to determine whether “on track” is a misnomer considering net inflows since mid-April are a whole $3 billion.