Investors shift focus to Europe amid U.S. trade war uncertaintyEuropean equity funds see $100 billion inflow, US outflows doubleEurope must act fast to maintain investor interest, says KfW’s WintelsBy Christoph SteitzFRANKFURT, June 30 (Reuters) - Peter Roessner is feeling both sides of Donald Trump’s trade war.While tariff risks mean the CEO of Luxembourg-based hydrogen firm H2Apex (H2A.DE) can no longer rely on U.S. suppliers for its more than 200 million euro ($235 million) project in Lubmin, Germany, investor interest in European projects is rising.“Investors in the hydrogen sector are now focusing more on the European market due to the absolute uncertainty and planning insecurity in the USA,” he told Reuters, adding this included both local and U.S. players.“The framework conditions in Europe are not ideal, but they are stable.” Roessner’s comments are indicative of a trend that has taken hold in recent months: Investors and companies are increasingly turning to Europe, drawn by an infrastructure- and defence-led spending push that offers stability at a time when Trump’s erratic tariff policies have made the U.S. market a less safe bet, according to more than a dozen interviews with executives and fund managers. The shift has also been fuelled by Trump’s tendency to make sweeping tariff threats and announcements that are then often delayed or changed, and to draw up executive orders that have tested the limits of his presidential power.“The U.S. is coming from a very capital market-friendly and stable environment. Now there is political intervention and also an attempt to expand power,” said Christoph Witzke, who heads the CIO office at Deka, one of Germany’s largest investment funds.“This creates uncertainty that some kind of intervention … could come at any time,” he said, adding that Europe had become the centre of attention in the most recent investor conferences as a result. With a July 9 deadline for a trade deal less than two weeks away - and Trump saying he will impose 50% tariffs on all EU goods without a deal - investors have started shifting their money.Data from LSEG’s Lipper Funds show that more than $100 billion has flowed into European equity funds so far this year - up threefold from the same period last year - while outflows from the U.S. more than doubled to nearly $87 billion.“All that is an indication that at least market forces, investors, those who move real money around, actually see value and have confidence in Europe,” ECB President Christine Lagarde said earlier this month. This shift in focus was also illustrated by the weak market debut of Holcim’s (HOLN.S) North American spin-off Amrize (AMRZ.N) (AMRZ.S) in late June, which was announced to much fanfare in early 2024 at a time when the lure of U.S. valuations also got some of its rivals excited.In contrast, the share price of Holcim itself, now squarely focused on Europe, Latin America and North Africa, soared 15%.<h3 id="10bh6mpkg">SENTIMENT CAN QUICKLY TURN</h3>Siemens Energy (ENR1n.DE) , which makes more than a fifth of its sales in the U.S., has noted a shift in sentiment, finance chief Maria Ferraro said, on the back of a recent U.S. road show and an 84% rise in the group’s share price year-to-date.Apart from the improved market view, more investments are also crucial in efforts to revive the EU’s economy and narrow its competitiveness gap compared with other regions, most notably China and the United States.Closely watched foreign direct investment flows into Germany, the bloc’s largest economy, more than doubled to 46 billion euros in the first four months of 2025, according to the most recent data from the Bundesbank, marking the highest level since 2022.It also shows that German companies even pulled money out of the United States in three of the first four months of the year, with their balance of foreign direct investments in April at a negative 2.38 billion euros.Negative balances emerge when companies either divest more than they invest in a foreign country or decide against extending credit lines to local counterparts.But the picture is not all rosy, with several investors pointing out that Europe is now under pressure to act faster, create better regulation and make good on its spending pledges.“This sentiment can quickly turn again. This should be both a warning and an incentive to use the momentum now and consistently implement the planned agenda,” said Stefan Wintels, head of German state-backed lender KfW (KFW.UL) .This chimes with comments from Hajo Kroesche, partner at private equity firm Altor, who said “the window of opportunity will not stay open forever” for Europe to attract capital.Having recently travelled to Qatar, Abu Dhabi and Saudi Arabia, Deutsche Bank CEO (DBKGn.DE) Christian Sewing last week said investor interest in Europe and Germany was huge - while still cautioning that conditions needed to be stable in the long-term.“These are not people who invest within two days. But of course they see what is happening in the world right now.”($1 = 0.8520 euros)Europe’s equity boost<figure class="image"><img src="https://pub.pbkrs.com/uploads/2025/fb3c9a32af2a5d37407c9f7b8a50ad6d?x-oss-process=style/lg" alt="" width="1488" height="1002" original-src="https://pub.pbkrs.com/uploads/2025/fb3c9a32af2a5d37407c9f7b8a50ad6d"/></figure>

Investors are increasingly turning to Europe amid uncertainties in the U.S. due to trade war concerns. European equity funds have seen inflows of over $100 billion this year, while U.S. outflows have doubled to nearly $87 billion. Executives note that while Europe’s conditions are not ideal, they offer stability compared to the unpredictable U.S. market. However, there are calls for Europe to act quickly to maintain this investor interest, as the current momentum may not last.

- Investors are increasingly shifting their focus to Europe due to uncertainty surrounding the U.S. trade war, with over $100 billion flowing into European equity funds this year.  
- This trend is driven by a stable investment environment in Europe compared to the unpredictable U.S. market, as highlighted by executives and fund managers.  
- However, there are concerns that Europe must act quickly to maintain this momentum and improve regulations to attract and retain investor interest.  

Investors flock to Europe as bloc's stability contrasts with concerns over US