Core Viewpoint - The article discusses the global trend of "de-dollarization" driven by concerns over U.S. policy uncertainty and fiscal sustainability, leading institutions to diversify their dollar holdings into assets like gold and European stocks [3]. Group 1: U.S. Dollar Asset Concentration - Despite a significant rebound in U.S. stocks since April, concerns over the concentration of dollar assets remain high, prompting a focus on diversification [8]. - Foreign investors hold 32% ($19 trillion) of U.S. stocks and 35% ($13 trillion) of U.S. Treasury bonds, indicating their critical role in the U.S. financial system [8]. - The weight of the S&P 500 in the MSCI International Index has increased from 50% in 2010 to 72% today, reflecting the long-term strong performance of U.S. stocks [8]. Group 2: European Market Opportunities - The European stock market has outperformed globally this year, with the DAX index rising nearly 20% and the Euro Stoxx 50 index increasing approximately 12.73% year-to-date [12][13]. - Germany is relaxing its fiscal discipline, which may lead to synchronized adjustments in the European fiscal framework, benefiting sectors like defense, industrials, and renewable energy [14]. - European fixed-income assets are becoming more attractive, with better returns compared to U.S. bonds after accounting for currency hedging [15]. Group 3: Emerging Markets and China - Emerging markets, particularly the Hong Kong stock market, are also seeing increased investment as funds diversify away from the U.S. [16]. - The Swiss bank maintains an overweight position in the Chinese stock market, citing a GDP growth advantage of about 2% over developed economies [16]. - Concerns about profit margins in Chinese companies persist, but recent strategies aimed at eliminating weaker firms may positively impact overall profitability [18].

Group 1 - The weight of the S&P 500 in the MSCI International Index has increased from 50% in 2010 to 72% now, reflecting the long-term strong performance of US stocks [1][2] - Global institutions are increasingly concerned about the concentration of dollar-denominated assets, leading to a focus on diversifying their dollar exposure [2][3] - The US stock market remains the most profitable globally, driven largely by technology giants, but the current market rebound is concentrated among a few leading companies [3][4] Group 2 - European stock markets have outperformed globally this year, with significant gains in indices such as the DAX and Euro Stoxx 50, driven by a narrative of "de-dollarization" [4][5] - Germany is relaxing its long-standing fiscal discipline, which may lead to synchronized adjustments in the European fiscal framework, benefiting sectors like defense, industrials, and renewable energy [5][6] - The overall bond yield environment in Europe is improving, making fixed-income assets more attractive compared to US bonds, particularly for European and Swiss investors [6][7] Group 3 - Emerging markets, particularly China, are also seen as potential areas for capital diversification, with a focus on the improvement of profit margins in the Chinese market [7] - The recent "anti-involution" strategy in China aims to eliminate weaker companies and address overcapacity issues, which is viewed positively for future profitability [7]

Group 1 - The topic of "de-dollarization" has gained global attention due to U.S. policy uncertainties and concerns over fiscal sustainability, leading institutions to consider diversifying their dollar holdings [1][4] - European asset managers, particularly those with a long history, are becoming influential in discussions about hedging dollar exposure and reallocating funds to euros and Swiss francs [1][4] - The U.S. stock market's dominance in the MSCI global index, accounting for 72%, may face challenges as more funds flow into European small and medium-sized companies, especially with increased defense spending in Germany [1][4] Group 2 - Concerns over the high concentration of dollar asset holdings persist, despite a rebound in U.S. stocks since April, with institutions still focused on diversification [4][7] - Foreign investors hold significant portions of U.S. equities (32% or $19 trillion) and U.S. debt (35% or $13 trillion), indicating their importance to the U.S. financial system [4] - The S&P 500's weight in the MSCI international index has increased from 50% in 2010 to 72% now, reflecting the long-term strong performance of U.S. stocks [4] Group 3 - The U.S. stock market remains the most profitable globally, driven largely by technology giants, but the current market rebound is concentrated among a few leading companies [7][8] - Pictet has adjusted its U.S. economic growth forecast down to 1.8% from 2.1% while raising the Eurozone growth forecast to 1.5%, indicating a potential shift in economic dynamics [7][8] - The S&P 500's market capitalization is heavily influenced by technology companies, which derive about 50% of their revenue from overseas, benefiting from a weaker dollar [7] Group 4 - There is a noticeable trend of marginally increasing allocations to European equities, as selling U.S. stocks is not seen as a viable option [8] - European stock markets have outperformed globally this year, with the DAX index rising nearly 20% and the Euro Stoxx 50 index increasing approximately 12.73% [9] - Germany's relaxation of fiscal discipline and increased defense spending may lead to a synchronized adjustment in European fiscal structures [9] Group 5 - European fixed-income assets are becoming more attractive, with Germany's low short-term debt financing ratio (5% compared to the U.S. at 22%) indicating greater capacity for new spending [10] - The overall bond yield environment in Europe is improving, making fixed-income returns more favorable than those in the U.S. after currency risk hedging [10] Group 6 - Emerging markets are also seen as a key area for diversifying investments, with Hong Kong's IPO market benefiting from the trend of capital moving away from the U.S. [11] - Pictet maintains an overweight stance on emerging markets, particularly China, which is expected to have a GDP growth rate approximately 2% higher than developed economies [12] - Concerns about profit margins in the Chinese market are prevalent among long-term foreign investors, despite the low valuations [12]