The $26 Trillion Question

Todd Speed, CFA

Since the Great Financial Crisis, overseas capital generally headed one direction—it flocked to the US, with the US net international investment position recently peaking at approximately $26 trillion, or nearly 90% of US GDP in 2024. For many investors, the US was “the only game in town” for over a decade, and global capital pushed this trade as far as it could muster, while providing nearly unrelenting support to US exceptionalism.

US net international investment position

Past performance is no guarantee of future results. Source: Jefferies, Asia Maxima, “The End of US Exceptionalism,” April 5, 2025, using data from the Bureau of Economic Analysis.

Over the past 15 years, US assets have grown from a third of global market value to nearly half. This is disproportionately large—keep in mind that the US economy is about 20% of the global economy, with about 5% of the population.

Share of US Assets, Globally

Past performance is no guarantee of future results. Source: Deutsche Bank Research, “Supersize Me: How big is the US overweight,” April 15, 2025, using Deutsche Bank, SIFMA, WFE, US Treasury Department, OECD, US Federal Reserve.

This dynamic is changing. Capital flows more freely than ever and it is on the move. Recent Bank of America data showed the largest monthly decline in US equities allocation on record. Money is in motion, across investment managers and clients. After years of US large-cap equity dominance, a major change in investor positioning is to seek non-US opportunities across multiple regions and a blend of cyclicals, commodities, and defensive exposures.

Net % overweight US equities, BofA Fund Manager Survey (FMS)

Past performance is no guarantee of future results. Source: BofA Global Fund Manager Survey.

Looking deeper below the surface, a view into one European market adds further insight. Sweden’s net inflows into Europe equities and out of North American equities shows the power of rotation.

Swedish Investment Fund Association, Net Inflows/Outflows to Equity Funds (SEK bn)

Past performance is no guarantee of future results. Source: Goldman Sachs.

While this pivot from the US applies mainly to financial assets, we are seeing it in other aspects of the economy, such as global travel volumes, where data shows a precipitous decline in European travel to the US.

Year-on-year change in visitors to the US, by country of origin (%)

Past performance is no guarantee of future results. Source: Financial Times, “European travellers cancel US visits as Trump’s policies threaten tourism,” April 11, 2025, using International Trade Administration, Department of Commerce, FT graphic: John Burn-Murdoch © FT.

We saw what can happen when markets shift from consensus positioning. During 1Q 2025, international stocks outperformed US stocks by the second-largest magnitude in 35 years.

Quarterly return dispersion (MSCI EAFE Index – S&P 500 Index)

Past performance is no guarantee of future results. Source: Morningstar Direct. Data as of 3/31/2025.

Is this return difference a three-month outlier or possibly the early innings of a larger rebalancing?

S&P 500 vs. MSCI ACWI ex USA relative performance

Past performance is no guarantee of future results Source: Morgan Stanley, “Weekly Warm-up: Range Trading Continues Until Clarity Arrives,” April 21, 2025, using FactSet, Morgan Stanley Research. Performance in USD. Recessions are indicated by shaded areas.

So, the times are changing, what to do? Diversify, commit more assets to non-US markets, and widen the aperture of opportunities in your portfolio. Calamos manages multiple investment strategies with a record of outperformance versus the broad index and peers. We believe our funds are positioned to benefit from the trends in global capital and key cyclical themes (for more, see our recent posts and outlooks). We see an evolving set of foreign growth opportunities, and our experience managing through several market cycles helps us act decisively in the face of disruption and volatility.

Calamos: A record of outperformance in global and international markets

Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance quoted. The principal value and return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. You can obtain performance data current to the most recent month end by visiting www.calamos.com.

Data shown is for Class I shares.  Calamos International Growth Fund is shown versus the MSCI ACWI ex USA Index and Morningstar Large Cap Growth Category. Calamos Evolving World Growth Fund is shown versus the MSCI Emerging Markets Index and Morningstar Diversified Emerging Markets Category. Calamos Global Equity Fund is shown versus the MSCI ACWI Index and the Morningstar Global Large-Stock Growth Category. Calamos Global Opportunities Fund is shown versus the MSCI ACWI Index and the Morningstar Global Allocation Category.

Total return assumes reinvestment of dividends and capital gains distributions and reflects the deduction of any sales charges, where applicable. Performance may reflect the waiver of a portion of the Fund’s advisory or administrative fees for certain periods since the inception date. If fees had not been waived, performance would have been less favorable.