Dollar depreciation last year might have even encouraged some overseas managers to load up on US securities
Published Thu, Feb 19, 2026 · 09:10 AM
[NEW YORK] Foreign purchases of US financial assets accelerated in 2025, led by demand for stocks and US Treasuries, data on Wednesday (Feb 18) showed – marking a sharp rebuttal of the “Sell America” narrative that’s become a regular feature of discussion among market participants.
Overseas investors bought a net US$1.6 trillion of long-term US financial assets in 2025, data released by the Treasury Department on Wednesday showed. That’s up from a net US$1.2 trillion of purchases the previous year. Of that total, US$658.5 billion went into equities and US$442.7 billion to Treasury notes and bonds.
US President Donald Trump’s regular threats of steep tariff hikes, deployed for reasons ranging from economic to geopolitical to national security, have triggered concerns that investors abroad will abandon American markets and the US dollar. Amid Trump’s pressure on Denmark over its island of Greenland, a Danish pension fund last month warned it was planning to exit its Treasuries position. Dutch fund Stichting Pensioenfonds ABP, Europe’s biggest, dramatically scaled back its exposure last year.
But Treasury Secretary Scott Bessent has regularly pushed back against the “Sell America” rhetoric, arguing that the administration’s economic policies enhance the US’s position as the top destination for global capital.
“Yes, there has been geopolitical instability as of late, and the sell-the-dollar trade has been popular as a result,” said Andrew Hazlett, a foreign-exchange trader at Monex. But ultimately Treasuries make up a large share of sovereign debt holdings, he noted. “I don’t really see a world where that changes.”
Dollar role
Dollar depreciation last year might have even encouraged some overseas managers to load up on US securities. Geoff Yu, senior macro strategist at BNY, one of the world’s largest custodians, said earlier this month that was what happened after the market gyrations spurred by Trump’s “Liberation Day” tariff announcement last April.
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“Our data show that cross-border investors took full advantage of the adjustment in US dollar valuation to add to US equity exposure,” Yu wrote in a note last week. “Although allocations are not as strong as during the ‘US exceptionalism’ period from 2023 to 2024, the cross-border ‘premium’ remains intact.”
The Treasury’s figures suggest many overseas managers were willing to add to positions in the US last year. Besides stocks and Treasuries, net purchases of corporate bonds totalled US$327.8 billion last year. Securities issued by Fannie Mae, Freddie Mac and other so-called agencies amounted to a net US$112.9 billion.
On a regional basis, Europe accounted for US$872.8 billion of the net influx of money to long-term financial assets, defined as over one year. The Cayman Islands purchased a net US$277.2 billion, while Japan bought a net US$56 billion. Canada totalled US$84.4 billion.
China sells
The Treasury cautions that it can be challenging to identify the ultimate origin of ownership, however. A number of the biggest net purchases came from locations known for their tax advantages, such as the Cayman Islands and Guernsey, and for their custodial roles in global finance, including the UK and Belgium.
China was a notable net seller of US long-term financial assets, in the amount of US$208.6 billion. Its holdings of Treasuries ended the year at US$683.5 billion, the lowest level since 2008.
Chinese holdings may come under extra scrutiny after a Bloomberg report earlier this month showed that Beijing’s regulators had advised financial institutions to rein in their holdings of US Treasuries, citing concerns over concentration risks and market volatility.
For the month of December alone, foreign holdings of Treasuries dropped by US$88.4 billion, to US$9.27 trillion, the lowest level since October. Japan, the largest overseas owner of US government debt, saw its position decline by US$17.2 billion, to US$1.19 trillion. UK holdings fell US$23 billion, to US$866 billion. BLOOMBERG
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