The Eurozone has become a new favorite for investors: billions of dollars flowing into European stock funds due to uncertainty in US policy causing capital outflows.

The stability of the eurozone stands in sharp contrast to the uncertainty of the US economy, resulting in a significant shift in capital flows. Peter Rosner, CEO of Luxembourg hydrogen company H2Apex, deeply feels the complex impact of the Trump administration's trade policy: although the uncertainty of American suppliers has led to supply chain restructuring for its 200 million German LURP project, the investment heat in the European market has significantly increased. "The planning risks in the American market have made hydrogen investors begin to see Europe as a more reliable choice," Rosner revealed that this shift is not only from European domestic capital, but also from some American investors who have adjusted their layout strategies. Market trends confirm this assessment. Data from the LSE Group's Lipper Fund shows that in the first six months of 2025, European equity funds attracted over $100 billion in cumulative inflows, triple the amount from the same period last year, while US funds experienced net outflows of nearly $87 billion during the same period, more than double the outflow amount compared to the previous year. The latest statistics from the German central bank are even more direct: in the first four months of 2025, foreign direct investment into Germany reached 46 billion, not only doubling compared to the same period last year but also setting a new high since 2022. It is worth noting that in February, March, and April of this year, there was a rare phenomenon of German companies withdrawing investments from the United States for three consecutive months, with the direct investment balance from Germany to the US in April alone showing a historic negative value of 23.8 billion. Corporate decision-makers deeply understand this shift. Maria Feraro, Chief Financial Officer of Siemens (SIEGY.US) Energy, pointed out that during a recent roadshow in the US, investors' interest in the European market has significantly increased, which is in line with the company's 84% stock price increase year to date. The strategic adjustment of construction giant Hochtief Group is even more symbolic: its North American spin-off company Amrize (AMRZ.US) performed weakly on its debut at the end of June, while its parent company focusing on the European, Latin American, and North African markets saw its stock price rise by 15% during the same period. Policy fluctuations have become a key driver of capital reallocation. The unpredictable tariff policies of the Trump administration have made the market nervous, from threatening to impose a 50% tariff on EU goods to frequent adjustments in executive orders, this uncertainty has directly impacted investment confidence. Christoph Witzke, Chief Investment Officer of DeKa Investment, bluntly stated, "Although the US capital markets remain friendly, political intervention risks are eroding their stability." ECB President Lagarde sees positive signals in the flow of funds: "Market participants are expressing confidence in Europe with real money." However, opportunities and challenges exist simultaneously. Stefan Winterles, CEO of German development bank KfW, warned that Europe must be wary of the fleeting nature of the "window of opportunity" and accelerate regulatory framework improvements and fulfill fiscal commitments. Hajjo Kroesher, Partner at private equity firm Altor, holds the same view: "Capital favor will not last indefinitely." Christian Sewing, CEO of Deutsche Bank Aktiengesellschaft, returned from a recent trip to the Middle East with first-hand observations: although Gulf investors are interested in Europe, long-term investment decisions still depend on policy continuity. "These capitals will not act impulsively, they are aware that the global landscape is being reshaped." The current situation is both an opportunity and a test for Europe. How to attract short-term funds while consolidating long-term competitiveness through structural reforms will be crucial in determining whether the flow of funds can be sustained. As Rosner said, "Europe's institutional framework is not perfect, but relative stability is particularly valuable during turbulent times." The subsequent evolution of this capital migration wave may reshape the global capital allocation landscape.