Investors boost US allocations while global FDI and green sectors struggle, reports UNCTAD and industry leaders
Record inflows into US markets are defying global investment headwinds, as leading asset managers point to continued confidence in American assets despite warnings of a broader slowdown, according to Reuters.
BlackRock CEO Larry Fink said that “most global investors have a very large overweight in the US and that's the place to have your overweight for the next 18 months.” He observed that, after previous outflows from dollar-based assets, funds have recently been returning to the United States.
David Solomon, CEO of Goldman Sachs, echoed this sentiment, stating that the “vast majority of capital allocation” is expected to remain in dollar-based assets, and that there is no clear catalyst for an economic slowdown in the United States over the next 6 to 12 months.
Bill Ackman of Pershing Square Capital Management played down concerns about US government debt, highlighting the strength and scale of government assets.
This optimism stands in contrast to the global investment landscape, which, as reported by the United Nations Conference on Trade and Development (UNCTAD), saw foreign direct investment (FDI) fall by 11 percent in 2024.
Developed economies experienced the sharpest declines, with Europe’s FDI inflows dropping by 58 percent, while North America bucked the trend with a 23 percent increase.
Investment in sectors critical to sustainable development—such as renewable energy, transport, and water—fell by more than 30 percent globally.
UNCTAD Secretary-General Rebeca Grynspan emphasized that “investment is about trust… today, that trust is under strain”.
Despite these declines, sustainable finance remains a bright spot.
UNCTAD reported a 17 percent increase in sustainable finance in 2024, reaching US$8.2tn, driven by growth in the green bond market.
Green bond issuance alone grew by 14 percent year-over-year.
Meanwhile, investment in digital industries is rising, though unevenly distributed, offering new opportunities for diversification, particularly in technology and services sectors.
As global investment flows shift, panelists at the UNCTAD conference and the Future Investment Initiative in Riyadh highlighted the importance of aligning investment strategies with long-term development goals and leveraging new financial instruments to support growth.
