Foreign investors dump $63 billion in US equities since March: Goldman Sachs

According to Goldman Sachs strategists, foreign investors have drawn an estimated $ 63 billion from the US equity from the beginning of March, warning that the trend may pose a risk for equity valuations. In a note for customers, the Daniel Chave-led team pointed to the high-frequency fund flow data, showing that European investors have been the main sellers, while other regions continue to accumulate American shares.
The Goldman team wrote, “This pose a sufficient risk for the dynamic equity valuration as foreign investors entered the 2025 with a record 18% owned portion of the US equity.”
A sharp decrease in holdings comes at a time when international partnership in the US stock market reached a historic high level. According to Goldman, there are 10 previous examples of selling important foreign investors since 1980. On average, those episodes resulting in selling 0.6% of the total US market value – about $ 300 billion in today’s terms.
Despite the current speed of outflow, Goldman said that the episode has been “small and shallow” than the previous cell-offs so far. Historical data shows that American equity has often managed to grow even in the midst of foreign withdrawal. In fact, in seven of the last ten examples, shares recorded only with 1987, 1990 and 2022.
While the recent wave of sales has so far triggered wide market weakness, the external ownership share of foreign investors means that their behavior is an important variable for equity markets.
(With input from Bloomberg)