In the months following the announcement of tariffs by the Trump administration, many U.S. institutional investors sought refuge from domestic equity and bond markets in anticipation of potential ramifications. Several turned to U.K. based asset managers with their inquiries, hoping to leverage their transatlantic position to attain ‘outside looking in’ advice on U.S. markets as well as a different perspective on global ones.
This trend came amid a significant weakening in the U.S. dollar that is only expected to worsen.
“The questions we were being asked were, ‘Is this the time to invest in international equities?’ and ‘What are your views on currency, Treasuries, and bonds?’” said Remi Olu-Pitan, head of multi asset growth and income at Schroders in London. “A lot of our American clients wanted to test our confidence in U.S. assets — whether we were still warm towards them and if this is the time to invest internationally or not.”
Baillie Gifford, an Edinburgh based manager, has likewise seen increased interest from U.S. based clients over the course of 2025, according to Nick Thomas, partner and head of the clients department.
“One of our biggest businesses is international equities to the American market, so the world ex-US, and that has got more interest,” he said. “We’ve been highlighting two main things: One is the big valuation gap that’s opened up, and the other one is there are some great companies in international markets that get a bit forgotten because so much of the AI boom that’s driving everything is American. But there are actually some pretty cool plays on that in Europe and Japan, so we’ve been investing heavily in them and pointing them out to clients, which has got some traction.”
He added that U.S. institutional investors are pretty under allocated in aggregate internationally.
Thomas’ colleague Joe Stellato, who heads up the distribution team for U.S. wealth in the NY office of the firm, agreed, saying “U.S. investors are so underweight towards emerging markets versus what we think is a sensible allocation and to where we’re seeing global opportunity,” he said. “If they simply moved closer to a MSCI ACWI neutral emerging markets weighting — it would be a significant leap forward.”
At Schroders, Olu-Pitan said that the firm’s advice was to increase international allocations and in particular to consider emerging markets because of their intrinsic link to the value of the dollar. She also recommended avoiding long-dated bonds because of unsustainable fiscal debt and a lack of confidence in policy, while stocking up on gold and maintaining somewhat light equity positions. “We are a little nervous because risk continues to do so well,” she said. “This may sound weird, because we should be happy, but we are apprehensive. There’s a difference between what people are saying and what they are doing, so there is a real risk that we’ll see a melt up, particularly with markets moving into extreme valuations.”
By way of example, Olu-Pitan referenced the lack of stability at the Federal Reserve and the uncertainty surrounding Jay Powell and the central bank’s future independence as somewhere where an external perspective can be valuable.
An Edinburgh-based equity manager, Walter Scott, which is owned by BNY Mellon but retains its autonomy, also seeks to leverage an international perspective to the advantage of U.S. clients. With its ex-USA international equity fund of large and mid-cap stocks, it is able to service its clients, approximately two thirds of which are U.S. based, with a bottom-up research strategy.
Walter Scott’s approach to the Chinese market is indicative of this benefit. Where geopolitical concerns may get in the way of some U.S. or E.U. collaboration with China, the U.K. is less impacted by the same restrictions. The firm believes that China remains a good investment prospect despite widespread concerns based on its stunted growth and problematic real estate sector, according to Tom Miedema, one of the investment managers at the firm.
“The whole global ex-U.S. businesses is basically American investors, with maybe one or two exceptions, and that was the original business model of Walter Scott when he founded the business,” he said, describing how the founder would fly to the U.S. wearing a kilt to sell international equities to Americans in the 1970s.
“The ex-U.S. market has been a tough sell over the last five years, but we’ve managed to retain most of our clients,” Miedema added. “The exceptionalism piece was clearly powerful, especially in retail markets who thought why bother with anything apart from S&P, but now it feels like that there is more interest that is turning into real flows.”
The firm harnesses BNY for its distribution and extensive client base in the country, as well as its large back office, allowing it to focus on research. In the wake of Brexit, the firm had to introduce a lot of new infrastructure to allow it to continue to work with EU clients and that has also been beneficial in its work with other international investors, including the U.S., Miedema added.
While Schroders’ Olu-Pitan noted that inquiries from U.S. investors have slowed down since June, she expects to see a higher frequency going into the new year. Others indicated that interest from U.S. investors has remained steady into the fourth quarter.
“Across the year, we have been engaging with a growing number of North American asset owners, who are interested in diversifying away from the home bias that has served them well over the last decade,” said Roy Leckie, executive director for investment and client service at Walter Scott. “It is becoming increasingly understood that the pendulum is swinging back towards superior returns being generated outside the U.S.”
