European ownership of U.S. stocks surges 91% over three years

A Kobeissi Letter report claims that Europeans are flooding into U.S. stocks, with ownership surging to over 91% (~ $4.9T) over the past three years. According to the report, Europeans currently own a record $10 trillion in U.S. stocks, which is almost equal to the rest of the world’s holdings at $10.9 trillion.

Kobeissi Letter notes that Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden, and the UK now hold roughly $5.7 trillion in U.S. equities. That accounts for over half (~55%) of the total European holdings. These European investors also account for almost half (~49%) of all foreign U.S. stock holdings. 

George Saravelos, the chief FX strategist at Deutsche Bank, also noted last week that European countries hold $8 trillion in U.S. equities and bonds. According to Saravelos, that is nearly twice as much as what the rest of the world owns combined. Meanwhile, European NATO countries hold $2.8 trillion in U.S. Treasury securities alone, rising to $3.3 trillion when including Canada.

However, U.S. Federal Reserve data contradict this, showing that the overall value of U.S. financial assets owned by European NATO countries is $12.6 trillion. The data also reveals that most of these bonds and stocks are overwhelmingly owned by the private sector (pension plans, insurance firms, banks, etc.), not European governments.

Nordic investor reassess U.S. exposure amid rising geopolitical tensions

Although European investors are notably piling into U.S. financial assets, big Nordic investors are growing increasingly wary of the risk of holding U.S. assets amid rising geopolitical tensions. Last week, two Nordic pension funds, Denmark’s AkademikerPension and Sweden’s Alecta, said they were either selling or in the process of selling their entire holdings of U.S. Treasuries.  

“We’re having a lot of discussions (with clients) around (whether) it is time to tilt away from U.S. assets.”

–Van Luu, global head of solutions strategy, fixed income and foreign exchange at Russell Investments

According to Luu, nearly 50% of Nordic countries are considering taking action against U.S. investments. He also mentions that the countries include the Netherlands and Scandinavia.

Meanwhile, Alecta said it has sold a big chunk of its U.S. bond holdings because risks related to the dollar and U.S. Treasuries are increasing. On the other hand, AkademikerPension blames weak U.S. government finances for its decision to divest its holdings by the end of the month.

Wall Street grapples with fears of European investors divesting  

Wall Street is reportedly grappling with fears that President Donald Trump’s belittlement of the European continent and belligerence could take some of the big investors of U.S. equities out of the market. Although Trump has softened his stance towards Europe, there are signs that this is already happening. 

Vincent Mortier, the chief investment officer at Amundi SA, also observes that more European clients appear to want to diversify from the U.S. financial assets market. He notes that the trend began in April 2025, but has accelerated somewhat this January. 

However, Mortier also notes that the “disentanglement” will be a long and complex process because clients will need to figure out how to depart from the main benchmarks. They will also be required to figure out how to hedge against the U.S. dollar.

Meanwhile, more than half of the $10.4 trillion in U.S. stocks owned by European investors is held by investors in eight countries that Trump has threatened with tariffs. Hugo Ste-Marie, a portfolio and quantitative strategist at Scotiabank, notes that this is a big enough chunk to pose a threat to the U.S. market. 

Ste-Maries also believes that accelerated diversification could weigh heavily on U.S. equities, the dollar, and bonds over time. However, she thinks it is improbable that Europe would even want to ditch U.S. assets.

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