Research by Morningstar has shown that asset owners around the world are reviewing their exposures to the US economy due to currency risk, policy uncertainty, and trade tariffs.
Three quarters (76%) of the more than 500 institutions surveyed by the data and research provider said they viewed trade disputes as material to their investments. Four in 10 respondents also said they had reduced, or were planning to reduce, their allocation to the US.
Morningstar’s Voice of the Asset Owner Survey 2025 covered asset owners from 11 countries with $19trn (£14trn) in combined assets under management.
The findings underline how geopolitics is shaping allocation decisions. Nearly three-quarters (73%) of asset owners said the current US administration had been material to their investment decisions in the past year, while 62% cited US dollar weakness. These pressures are combining to prompt many investors to reassess their US exposures and look for opportunities elsewhere.
However, there were regional differences in the drivers of US risk, from tariffs in Europe to regulatory uncertainty in the Asia Pacific region.
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Responsible investment and ESG strategies
While 58% of asset owners globally believe ESG has grown in importance over the past five years, the US stands out as the only market where more see it becoming less material (34%) than more (30%).
By contrast, Europe and Asia Pacific markets reported much stronger increases, pointing to a widening divergence in approach.
The findings show growing alignment between sustainability considerations and fiduciary duty, with 61% of asset owners globally, and 91% in the UK, now seeing ESG as supportive of their obligations.
Looking ahead, asset owners indicated that they were looking for practical opportunities in artificial intelligence (AI). Respondents to the Morningstar research identified three main areas of potential: easier access to relevant information and data (50%), improved data quality through automation (46%), and enhanced scenario analysis and forecasting (46%).
The report also highlighted how AI can be used operationally, from data validation and automated reporting to scenario modelling. These are practical applications that pension funds can adopt to strengthen oversight and efficiency, moving beyond the hype towards tools that directly support risk management.
