Dan Coatsworth, head of markets at AJ Bell, comments: “Over the past 12 months, AJ Bell has seen a sharp increase in its DIY investor customers buying global funds that deliberately exclude US assets, albeit from a small base. We looked at a sample of products with this investment focus and found a notable uptick in both the number of customers holding them and the amount of money invested. The biggest proportion of inflows has gone into SIPPs (self-invested personal pensions), followed by ISAs.
Why are these funds making waves?
“The rise in popularity of global ex-US funds could be the next leg of the asset rebalancing story that began in early 2025. Last year was all about the ‘Trump bump’, with investors embracing the US in the hope that looser regulation and a pro-business president would drive up American asset values. This year is all about the ‘Trump dump’ as his policies have proved divisive, causing some investors to regard the US as a less attractive play to make money. Some are concerned about the prospects for the US and want to dial down their exposure. Others want to avoid the region completely.
“Phase one of the portfolio rebalancing story started earlier this year and saw greater appetite for UK, European and Japanese investments. Phase two could be retail investors discovering a group of funds that allow them to cast their net wide but enable them to ensure their catch doesn’t include US-listed shares.
“The most popular global ex-US fund from AJ Bell’s sample among its customer base is Xtrackers MSCI World Ex-USA ETF, an exchange-traded fund tracking an index of large and medium-sized companies from global developed markets excluding the US. Its assets under management have increased from £276 million to £3.12 billion over the past 12 months*. In sterling terms, it delivered a 16.3% total return over that period**.
“Global funds are popular choices for retail investors with a long horizon. They provide broad access to companies around the world and are often the default option for people putting a set amount of money away each month. Taking the US out of this equation is now striking a chord with some investors. Others might think they already have sufficient exposure to the US via global funds, particularly as the country has a bigger slice of the pie than anywhere else.
“For example, many global funds track the MSCI World index which had a 72.45% weighting to the US as of 30 September 2025. By feeding additional contributions into a global ex-US fund, rather than a vanilla global fund, an investor would slowly be able to dilute their exposure to America.
“The US has arguably become too dominant a region in global tracker funds and many investors might be lured into a false sense of security that they’re getting true diversification, when in reality they’re not.”
*Source: Morningstar.
**Source: FE Fundinfo. Data to 7 October 2025.
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