Data released by the U.S. Treasury Department on Wednesday revealed that foreign investors accelerated their acquisition of U.S. financial assets in 2025, driven primarily by demand for equities and U.S. Treasury securities. This trend presents a strong counterpoint to the increasingly popular market narrative of "Selling America."
In 2025, overseas investors made net purchases of $1.55 trillion in U.S. long-term financial assets, an increase from the $1.18 trillion in net purchases recorded the previous year. Of this total, $658.5 billion flowed into equities, while $442.7 billion was directed toward U.S. Treasury securities, including medium and long-term notes.
Frequent threats from U.S. President Donald Trump to significantly raise tariffs have sparked market concerns that foreign investors might begin offloading U.S. assets and the U.S. dollar. For instance, a Danish pension fund warned last month of plans to exit its U.S. Treasury holdings after Trump pressured Denmark over Greenland. Similarly, Stichting Pensioenfonds ABP, Europe's largest pension fund based in the Netherlands, substantially reduced its exposure to U.S. assets last year.
However, U.S. Treasury Secretary Bessent has repeatedly refuted the "Selling America" narrative, arguing that the U.S. government's economic policies have strengthened the nation's position as the preferred global destination for capital.
An industry insider commented, "Recent geopolitical instability has indeed made shorting the U.S. dollar a popular trade. But fundamentally, U.S. Treasuries constitute a significant portion of global sovereign debt portfolios, and we do not foresee this structure changing."
The depreciation of the U.S. dollar last year may have even encouraged some foreign asset managers to increase their holdings of U.S. securities. Analysts noted that this dynamic was evident following the market volatility triggered by Trump's "Liberation Day" tariff announcement in April. Data indicates that cross-border investors capitalized on the adjustment in the dollar's valuation to increase their allocations to U.S. stocks. Although the allocation intensity did not match the robust levels seen during the "American exceptionalism" period of 2023-2024, a cross-border premium remains.
U.S. Treasury data suggests that many foreign investors were willing to increase their holdings of U.S. assets last year. Beyond stocks and Treasuries, net purchases of corporate bonds reached $327.8 billion. Net purchases of debt from Fannie Mae, Freddie Mac, and other so-called "agency bonds" amounted to $112.9 billion.
**Treasury Holdings by Major Countries/Regions**
In December alone, foreign investors' holdings of U.S. Treasury securities decreased by $88.4 billion, falling to $9.27 trillion, the lowest level since October. Japan, the largest foreign holder of U.S. government debt, reduced its holdings by $17.2 billion to $1.19 trillion. The United Kingdom cut its holdings by $23 billion to $866 billion. Mainland China decreased its holdings by $400 million.
For the full year, Europe contributed a net inflow of $872.8 billion into long-term U.S. financial assets (those with maturities exceeding one year). The Cayman Islands recorded net purchases of $277.2 billion, Japan $56 billion, and Canada $84.4 billion.
China recorded a net reduction of $208.6 billion in its holdings of U.S. long-term financial assets. By year-end, China's holdings of U.S. Treasuries fell to $683.5 billion, the lowest level since 2008.
The U.S. Treasury Department noted the difficulty in identifying the ultimate source of asset ownership. Some of the largest sources of net purchases are regions known for tax advantages, such as the Cayman Islands and Guernsey, while others are global financial custodial centers like the United Kingdom and Belgium.
**Other Key Points from TIC Data**
The Treasury International Capital (TIC) data also showed:
* In December, the total net foreign acquisition of long-term securities, short-term U.S. securities, and banking flows resulted in a net inflow of $44.9 billion. This consisted of a $32.7 billion net inflow from foreign private sources and a $12.2 billion net inflow from foreign official sources. * Foreign residents increased their holdings of U.S. long-term securities, with net purchases of $62.9 billion. Net purchases by foreign private investors were $55.7 billion, while foreign official institutions accounted for $7.2 billion. * U.S. residents increased their holdings of foreign long-term securities, with net purchases of $34.9 billion. * After adjusting for factors such as estimated foreign portfolio investment in U.S. stocks via stock swaps, the overall estimated net foreign purchases of U.S. long-term securities in December were $28 billion. * Foreign residents increased their holdings of U.S. Treasury bills by $9.7 billion. Their holdings of all dollar-denominated short-term U.S. securities and other custody liabilities rose by $12.1 billion. * Banks' own net dollar-denominated liabilities to foreign residents increased by $4.8 billion.
The TIC data for January of this year is scheduled for release on March 18, 2026.