US Markets Risk

chiang_mai

https://forums.moneysavingexpert.com/discussion/comment/81889286#Comment_81889286

Half the price, through HL.

https://www.hl.co.uk/funds/fund-discounts%2C-prices--and--factsheets/search-results/i/invesco-pacific-class-z-accumulation

It's also worth noting that the fund has beaten the index for 8 out of the past 10 years.

I used to hold this fund, I only switched because I wanted to be able to adjust my Japan allocation directly so I separated Japan from Asia Dev. and EM. I favour funds that invest in multiple regions because it gives the FM somewhere to go when things get uncomfortable.

masonic

https://forums.moneysavingexpert.com/discussion/comment/81889314#Comment_81889314

If you want an Asia Pacific including Japan fund, then this is probably the best option. A tracker would require 2-3 funds unless you dig down into the ETF weeds.

The Z class is not a HL exclusive, it can be bought for an OCF of 0.91% elsewhere too.

Performance-wise, it seems to be one of those funds that goes through fits and starts, hugging the index for periods, then inexplicably soaring ahead, then losing ground before the cycle repeats. It has just been through one of the soaring periods, which may or may not continue. It was a good fund to hold between 2012 and 2018, and between 2023 to date. After recent performance it could be a good time to take profits. That said, it doesn't have a track record of giving up all of its accumulated gains in a downturn like many others, but the initial entry point is material on your medium term experience.

chiang_mai

Smoke and Mirrors:

"(Bloomberg) — Foreign purchases of US financial assets accelerated in 2025, led by demand for stocks and US Treasuries, data on Wednesday 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 $1.55 trillion of long-term US financial assets in 2025, data released by the Treasury Department on Wednesday showed. That’s up from a net $1.18 trillion of purchases the previous year. Of that total, $658.5 billion went into equities and $442.7 billion to Treasury notes and bonds".

https://financialpost.com/pmn/business-pmn/foreigners-rebuff-sell-america-and-buy-a-net-1-6-trillion-in-assets

It would be interesting to see how the picture changes, if the price of Mag 7 related stocks was normalised for the year and whether that changes the narrative regarding USA assets. An easy task for @OldScientist perhaps?

OldScientist

https://forums.moneysavingexpert.com/discussion/comment/81890702#Comment_81890702

Although the general effect of 'supply and demand' on stock prices is easy enough to understand (although with algorithmic market making it may not be so easy, e.g., see https://advisor.morganstanley.com/meridian-point-group/documents/field/m/me/meridian-point-group/ALMM.pdf ), it is beyond my understanding to calculate.

I do note that $658 billion inflow can be compared to an overall value of ~$69000 billion for the US stock market - in other words, the net foreign inflows were about 1% of the total value. No idea how this compares with in/outflows for other stock markets.

InvesterJones

Vanguard's life strategy reduction of UK bias in action ;)

I jest, but since US still makes up more than a majority of market cap, any market cap weighted trackers will I guess continue inflows while markets are increasing (which they are). I guess similar in treasuries - they make up such a proportion of worldwide fixed income that even keeping the status quo will involve inflow as long as the total market increases.

Maybe it's simply a story that worldwide there is increased investment in stocks/bonds rather than in factories etc.

chiang_mai

https://forums.moneysavingexpert.com/discussion/comment/81890999#Comment_81890999

My suspicion, and it is only a suspicion, is that if the Mag 7 and Tech Sector over performance were recalibrated to more normal levels, the net effect would show a reduction in US equities sales, despite the increased sales of market cap weighted trackers. I have seen ample anecdotal evidence over the past nine months that many global funds have reduced their US allocations, something I had looked for previously but was unable to find, to any meaningful extent.

InvesterJones

https://forums.moneysavingexpert.com/discussion/comment/81891037#Comment_81891037

Depends what they bought with the sales of Mag 7/Tech - if they rotated out to other sectors, or diversified, you could see both a drop in tech and a US inflow.

But I think we're forgetting that 2025 is a whole year, not just the last few months - the rotation out of tech happened towards the end of the year, after tech/comms had already made massive gains so I think over the whole year, they still grew the most.