Investors are increasingly moving their assets into European investments, seeking to diversify their portfolios away from the US due to market turbulence. Valerie Urbain, Euroclear Chief Executive Officer, noted a growing interest in European assets from clients in the Middle East, Asia-Pacific, and China throughout 2025. This shift is also influenced by President Donald Trump's market impact.
Jupiter Asset Management is a notable example of this trend, having zeroed out its US Treasury holdings in one of its main bond funds. This $63.5 billion asset manager has instead shifted its exposure to European government notes and increased its emerging-market positions. Ariel Bezalel, Jupiter's portfolio manager, cited concerns about the US economy being overheated and the market overpricing European Central Bank rate hikes as reasons for this change.
Data from Lipper supports this shift, showing net inflows of $3.05 billion into eurozone government bond funds in Q2 2026, compared to just $1.69 billion for US Treasury funds in the same period. This contrasts sharply with Q1 2026, where US Treasury funds attracted $4.39 billion versus $829 million for eurozone equivalents. Higher yields in Europe, with some fixed income opportunities offering 4% to 6% yields, are making European bonds attractive, according to experts like Raphael Stern of Invesco and Marco Bontognali of UBS Asset Management. However, Trustnet data indicates that European funds saw net outflows of $3.8 billion in the first half of 2026, with only $942 million in net inflows for those above the $100 million threshold, suggesting some profit-taking amidst increased uncertainty.
