In recent weeks, the 'sell America' trade has gained traction. 

Just a few short months ago, many investors had high hopes for US President Donald Trump's second term. With promises of less regulation and lower taxes, markets rallied for several months after his election victory. 

However, this optimism was short-lived. In February, cracks started to appear as the 47th President began to roll out his tariff plans. 

Although tariffs had been discussed at length on the campaign, many investors believed they were a negotiating tactic. When Trump unveiled widespread tariffs on 2 April, the market reacted very negatively. 

While a falling US dollar and a rise in bond yields are common in emerging markets, they are very rare in the US. In fact, this is only the fifth time in the past thirty years that it has occurred.

Many institutional investors have recently initiated the 'sell America trade', reducing their exposure to US equities. 

In March, the Australian Financial Review reported that the biggest Australian superannuation funds had been repositioning their portfolios towards international shares. Super funds currently invest around $630 billion in US assets. 

Europe has gained traction as a viable alternative, with many institutional investors increasing their exposure.Investors who own a US-focused exchange-traded fund (ETF) such as the Vanguard US Total Market Shares Index AUD ETF (ASX: VTS) have several options to mimic this position. Specifically, they could sell part or all of their US-focused ETFs and invest in the following alternative options.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Investors looking to reduce US exposure could invest in the Vanguard MSCI Index International Shares ETF. For a management expense of 0.18%, investors gain diversified exposure to 1,304 companies. This ETF is somewhat diversified away from the US, with 5.5% invested in Japan, 3.8% in the United Kingdom, 3.2% in Canada, 2.9% in France, and 2.5% in Germany. Its five-year track record is also strong, having risen 72% over that time.

Vanguard FTSE Europe Shares ETF (ASX: VEQ)

Those even more pessimistic on US equities may wish to diversify away from them entirely. Vanguard FTSE Europe Shares ETF provides low-cost exposure to companies listed in major European markets. It is also very diversified, with 1,247 holdings. However, its management fee is slightly higher at 0.35%. Its long-term track record is also inferior to VGS', having climbed 60% over the past five years.

Betashares FTSE 100 ETF (ASX: F100)

Finally, those particularly bullish on the United Kingdom may be more enticed by the Betashares FTSE 100 ETF. This ETF provides exposure to the largest 100 companies listed on the London Stock Exchange. Its management fee is the highest of the three ETFs, at 0.45%. Its 5-year performance is also the weakest, having increased by 56%.

Foolish Takeaway

ASX ETF investors looking to get on the 'sell America' bandwagon have several options. VGS, VEQ, and F100 have exposure to European markets of varying degrees. Each ETF has delivered strong results over the past five years, making them all solid choices based on their track record.