In a notable shift in investment strategy, global investors are increasingly diverting their attention towards non-U.S. “value” stocks as they express concerns over inflated valuations and fiscal pressures within the United States. Data reveals that U.S. growth funds experienced significant outflows, totaling $152 billion in the first nine months of 2025. This figure already matches the total withdrawals recorded for all of 2024, even as the S&P 500 index reached an all-time high.
Both U.S. growth and value funds have faced continued redemptions, but the outflows from growth funds have been notably more substantial. According to LSEG data, asset managers overseeing over $6 trillion indicated that investors are favoring non-U.S. stocks, particularly value and small-cap equities. These segments are seen as likely beneficiaries of more accommodating monetary policies, fiscal stimulus, and relatively lower valuations compared to their U.S. counterparts.
The appeal of non-U.S. value stocks lies in their attractive fundamentals, including stronger earnings and profit margins in developed markets outside of the U.S. and Canada. Favorable valuations combined with the potential for income—often through dividends—are drawing investors to sectors such as financials, industrials, and energy.
Sebastien Page, head of global multi-asset and chief investment advisor at T. Rowe Price, highlighted a preference for non-U.S. value stocks based on their current valuation. His firm manages $1.73 trillion in assets, with Page’s division contributing $602 billion. He pointed out that value stocks have demonstrated cumulative outperformance and remain comparatively cheap by historical measures.
Emerging market and European stocks are gaining traction, especially as investors diversify away from U.S. equities. John O’Toole, global head of multi-asset solutions at Amundi, mentioned that the firm shifted its long equity positions into European, Japanese, and emerging markets, citing a compelling valuation case for diversifying portfolios. However, U.S. growth funds still showcased strong performance driven by the resilience of technology and communication companies, many of which benefit from advancements in artificial intelligence (AI).
Despite the heavy redemptions in growth funds, these stocks are poised to continue leading in performance, largely due to the strong earnings from tech and communication giants. Gary Tan, a portfolio manager at Allspring Global Investments, noted that firms are still facing concentration risk in the U.S. as investment in AI technology remains predominantly focused in that market.
As the global investment landscape evolves, the diverging fortunes of value and growth stocks indicate a critical juncture for portfolio strategies, with non-U.S. equities gaining newfound interest from investors seeking stability amidst increasing economic uncertainties.
