Why the "Sell America" trade is not as bad as it sounds
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The "Sell America" trade is in focus after President Trump has threatened to take over Greenland, leading to declines in the U.S. dollar, bonds and stocks.
Why it matters: The trade isn't being talked about because investors are so worried about that threat or because they think the American economy is crashing. It's because they think they can make more money abroad.
What they're saying: Not even war will get investors to divest out of the U.S., Ed Al-Hussainy, portfolio manager at Columbia Threadneedle, tells Axios.
- Investors are looking beyond the U.S. and seeking to increase their exposure internationally, but that's about yield and diversification.
- "No one thinks that America is going to collapse," Marko Papic, chief strategist at BCA Research, tells Axios.
State of play: Greenland is the "cherry on top" of a "Sell America" trade, according to Papic, who is underweight the U.S.
- Investors should "favor non-American stocks" but "no professional investor is going to take America to zero," he adds.
- International stocks outperformed the S&P 500 in 2025.
- If that happens again in 2026, portfolio managers who stayed overallocated to the U.S. will be "dusting off their résumés."
Case in point: Danish pension fund AkademikerPension made headlines on Tuesday saying it would divest from U.S. Treasuries by the end of the month.
- The pension fund will keep money parked in the U.S. dollar and short-dated agency debt, according to a statement from its chief investment officer provided to Axios.
- In other words, the fund is reallocating within dollar-denominated assets, not exiting the U.S. financial system.
Threat level: Ray Dalio, founder of the hedge giant Bridgewater Associates, told CNBC in Davos on Tuesday that "the monetary order is breaking down," adding "maybe there's not the same inclination to buy U.S. debt."
- That is not yet showing up in fund flows. In 2025, foreigners continued to be net buyers of U.S. Treasuries.
- After U.S. Treasuries initially dipped and yields spiked on Tuesday, dip buyers came to the market, showing continued demand.
- Still, Al-Hussainy says any country selling U.S. debt would be something to monitor as trade tensions flare.
Follow the money: So why would global investors keep their cash in U.S. assets amid increased geopolitical tensions and volatile policies from the Trump administration?
- A market acronym, TINA, explains the disconnect: There is no alternative to U.S. Treasury bonds in terms of liquidity, safety and scale.
- With U.S. government bonds, you get what is historically a guaranteed return and you know you can cash out any time thanks to the U.S. bond market being the most liquid in the world.
- Some investors question whether that will last forever. But when push comes to shove, there is still nowhere else big enough for them to turn.
- "The threshold to dislodge foreign investors from U.S. markets is very, very high," Al-Hussainy says. "Where are they going to go?"
The bottom line: Investors are "hungry hippos," he notes. They go where they can get the most yield. Politics are not top of mind.
