We may be witnessing the first tremors of a seismic shift, as Asia begins to question its $7.5 trillion bet on a politically and fiscally uncertain America. I was pleased to contribute to a recent Bloomberg article examining what may well mark a historic turning point in global capital flows.

For decades, Asia’s export-led growth model has relied on a simple financial strategy: sell goods to the US and then invest the proceeds in American assets. The article highlights how this long-standing cycle is showing signs of considerable fatigue. Deepening political polarisation, deteriorating fiscal fundamentals, as well as unpredictable trade and currency policies are challenging the reliability of the model and eroding the perception of the US as a global safe haven.

In my own contribution, based on numerous conversations, I noted that sovereign wealth funds, institutional investors and family offices across Asia have been gradually reducing their exposure to US markets for more than a decade. This rebalancing, once slow and measured, is now gaining considerable traction.

The shift appears to have become structural. Asian capital is no longer flowing reflexively into US Treasuries and equities. Instead, it is being directed towards attractive opportunities closer to home, in regions with strong policy anchors and greater strategic alignment. Markets in Japan, ASEAN and India as well as select domestic plays are drawing increasing attention.

The implications for global portfolio strategy are difficult to overstate. What began as a gradual erosion of confidence is now prompting a fundamental reassessment of long-standing financial assumptions. This trend challenges the orthodoxy that has long shaped global capital markets and has most profound implications for portfolio allocators who fail to take the strategic shift into account.

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