Wall Street Investors Flee US Stocks in September 2025, Pivoting to Foreign Banks and Gold Miners
- Why Are Investors Abandoning US Markets in September 2025?
- Where Is the Smart Money Flowing?
- European Banks: The Unexpected 2025 Powerhouses
- Gold's Shimmering Appeal in Uncertain Times
- The AI Effect: Reshaping Global Portfolios
- Frequently Asked Questions
As September 2025 unfolds, Wall Street is witnessing a dramatic shift in investment strategies. Historically a brutal month for US equities, this year is proving no exception. The S&P 500's August highs above 6,500 points and record Dow Jones performances have given way to a mass exodus toward international markets. Fund managers are aggressively reallocating capital to European and Asian banks, Gold mining companies, and semiconductor manufacturers through vehicles like Lazard's International Dynamic Equity ETF (IEQ). This $422 million fund, converted from a mutual fund in May 2025, has already earned Morningstar's five-star rating while charging just 0.40% in expenses.
Why Are Investors Abandoning US Markets in September 2025?
The numbers don't lie - September has consistently been the worst month for the Dow Jones, S&P 500, and Nasdaq. Data from TradingView shows these indices typically suffer their most significant declines during this period. Paul Moghtader, Managing Director at Lazard, explains: "We're seeing perfect storm conditions - overvalued tech stocks, dollar weakness, and geopolitical tensions make international exposure increasingly attractive." His team evaluates every position across four metrics: valuation, growth potential, quality, and market sentiment, even incorporating macroeconomic factors like GDP growth beta.
Where Is the Smart Money Flowing?
Lazard's IEQ ETF reveals the new hotspots:
- Taiwan Semiconductor Manufacturing (TSMC) leads holdings at 4.2%
- BNP Paribas follows at 2.1% after its AXA Investment Managers acquisition
- Other European banks like Société Générale (+94% YTD) and Barclays (+34%)
- Canadian gold miners Barrick (+72%) and Kinross (+125%)
European Banks: The Unexpected 2025 Powerhouses
Europe's banking sector hit 2008-level highs in early August 2025. Commerzbank's 100%+ surge exemplifies the trend, fueled by strong earnings and revived transaction activity. BNP Paribas' strategic moves have particularly impressed analysts. As Moghtader notes, "Their asset management expansion creates shareholder value that US tech can't match at current valuations."
Gold's Shimmering Appeal in Uncertain Times
With interest rate volatility and currency fluctuations, Lazard allocates 3% of IEQ to gold miners. "It's our macroeconomic insurance policy," Moghtader explains. The strategy appears prescient - Kinross's 125% explosion highlights gold's safe-haven status during September's traditional turbulence.
The AI Effect: Reshaping Global Portfolios
While US tech stumbles, Lazard pivots to hardware plays like Amphenol and Western Digital. "AI makes software development cheaper," Moghtader observes, "but physical infrastructure becomes more valuable." This contrasts sharply with Europe's media sector collapse - WPP's 71% profit plunge shows AI's disruptive dark side.
Frequently Asked Questions
Why are investors moving money overseas in September 2025?
Historical trends show September typically delivers the year's worst US market performance. Combined with overvaluations and geopolitical risks, this creates strong incentives for international diversification.
Which sectors are benefiting most from this shift?
European banks and Canadian gold miners are seeing massive inflows, with many stocks posting 50-100% gains year-to-date through August 2025.
How can retail investors participate in this trend?
Products like Lazard's IEQ ETF (0.40% expense ratio) offer diversified exposure. Always consult financial advisors before making portfolio changes.
