Investors pour $140bn into US ownership funds after Trump election win

Investors have pumped almost $140bn into US ownership funds since last month’s election as traders bet Donald Trump’s administration will unleash sweeping levy cuts and reforms in a boon to corporate America.

US ownership funds have notched up inflows of $139.5bn since Trump’s win on November 5, according to data provider EPFR. The rush of buying made November the busiest month for inflows on records stretching to 2000.

The flood of recent money has helped to drive the major US ownership indices to a series of record highs, with traders shrugging off concerns that policy proposals such as widespread increases in tariffs could drive up expense boost and threaten the Federal savings’s plans for further profit rate cuts.

“The growth agenda that Trump is putting on the table is being fully embraced,” said Dec Mullarkey, managing director at investment advisor SLC Management, adding that Trump’s picks for top administration posts have been “pretty trade amiable.”

Trump plans to pack his administration with financiers, including investor Scott Bessent as Treasury secretary and crypto enthusiast Paul Atkins as stocks and bonds and swap percentage chair. The president-elect has also vowed that his government will seek to cut regulations and taxes as part of an agenda aimed at boosting growth.

The S&P 500, Wall Street’s main equities barometer, has risen 5.3 per cent since election day, bringing its gains for this year to 28 per cent. Smaller companies, which are seen as more sensitive to fluctuations in the US economy, have performed even better since the election, with the Russell 2000 last week hitting a record high for the first period in three years.

Kevin Gordon, elder fund strategist at Charles Schwab, contrasted the broad gains with previous trade surges in 2021 and the first half of this year.

“The well facet of [the rally] correct now is we’re not getting a repeat of 2021 when the trade was hitting all-period highs but breadth was deteriorating. I ponder it’s a relatively well set-up” he said.

November was the strongest month for flows into ownership funds globally since the peak of meme ownership mania in early 2021. However, strength in the US disguised weakness elsewhere, with investors yanking money from other markets that are seen as more vulnerable to a potential trade war. 

Funds that invest in emerging markets have suffered net withdrawals of $8bn since the election, including around $4bn exiting China-concentrated funds. Those that invest in western Europe have lost around $14bn and Japan-concentrated funds lost around $6bn, according to EPFR.

US stocks have consistently outperformed regions such as Europe in recent years, thanks in large part to the strength of the tech sector. However, the gap has extended since the election, with analysts at financial institution of America this week describing the pattern as the “American exceptionalism” trade.

“When there is geopolitical uncertainty in the globe, the US is a secure haven, even if they’re the factor of that geopolitical uncertainty, ironically,” said Mullarkey. 

The latest surge has brought year-to-date inflows into US funds to $350bn, putting it on track for a record year, and few investors expect the recent rally to arrive to an complete soon. This week alone, a host of banks and property managers have predicted further powerful gains for US stocks in 2025, including BlackRock, Northern depend and BofA.

“We view the US still standing out versus other developed markets,” BlackRock said in its annual outlook update.

Parag Thatte, a strategist at Deutsche financial institution, said November’s rapid pace of inflows was likely to leisurely as post-election euphoria fades, but said longer-term trends could continue to inspire recent inflows that would boost the US trade next year.

“We don’t expect this benevolent of pace to continue, but we do ponder we will view fairly powerful inflows in 2025,” he said, citing solid projections for financial expansion and corporate profits, and well household funds balances. “There are powerful fundamental reasons for uncertainty appetite to be high at this point.”