Rob Citrone believes investment opportunities are more attractive outside the United States. The billionaire hedge fund manager stated he is positioning for a decline in U.S. equities, primarily because he expects the American market to continue underperforming compared to other global regions. "I am shorting the U.S. market and going long on global markets," the founder of Discovery Capital explained his investment strategy during an interview on Tuesday. Citrone indicated that the U.S. market has already begun to weaken relative to other asset classes. He pointed out that over the past year, U.S. assets, measured in U.S. dollars, delivered the weakest returns among 20 major global markets. The S&P 500 index rose 11% last year, while the iShares Core MSCI Emerging Markets ETF gained 34% over the same period. "The U.S. ranked 20th out of 20 markets," Citrone said, adding that U.S. market returns trailed emerging markets by approximately 30 percentage points last year. "The gap is very substantial."

**U.S. Market Valuations Are Too High** Citrone cited several reasons why he believes U.S. market underperformance will persist: Most global investors are "significantly overweight" U.S. assets. He noted that U.S. institutions typically allocate about 80% of their funds to the domestic market. "Most people will pull some money out of the U.S. and put it elsewhere," Citrone added. Emerging market valuations are also relatively low. U.S. assets are trading at a premium of about 40% compared to other global assets, a level Citrone described as "excessive." Uncertainty exists in the artificial intelligence sector. He stated the U.S. market also faces uncertainty regarding the business prospects of AI, with widespread concern over high corporate investment spending in AI, even though the monetization plans for some companies remain unclear. He also mentioned that several stock sectors have begun to see selling pressure due to fears that AI could disrupt existing business models, pointing to recent sell-offs in software, real estate, and trucking sectors. Citrone expressed a more favorable view of opportunities in emerging markets. He specifically highlighted the highly attractive investment environments in regions like Argentina and Brazil, and identified Mexico as his top choice due to its increasingly close economic ties with the United States.

**Mexico's Competitive Edge Makes It Appealing** "I believe Mexico is fully integrated with the U.S. and has superior leadership; the competitiveness of local companies is quite strong," Citrone said, adding that most companies in the country possess "significant competitive advantages" due to monopolistic or oligopolistic positions. Investors are increasingly looking to other parts of the world, a trend that has intensified since tariff policies were introduced, which triggered a wave of "selling U.S. assets" in the markets last year. Institutions including Goldman Sachs and Lazard have also warned that the U.S.'s dominant position in global markets may continue to weaken.