Allianz GI says Republicans undermine US investment appeal

Alex Bibani, senior portfolio manager at Allianz Global Investors, warns of a deteriorating investment climate in the US due to Republicans’ decision to overhaul clean energy legislation. The tax bill passed by the House of Representatives effectively repeals incentives contained in the 2022 Inflation Reduction Act. 

These changes sparked uncertainty among investors, Bloomberg notes. The continuation of this policy may prompt companies with commitments to environmental projects to divert investment flows into more stable regions. Europe’s top asset manager Amundi already sees significant outflows from the US market. At the same time, UBS Group AG notes significantly reducing investments in US exchange-traded funds.

Given the situation, analysts at Jefferies project investment flows to pivot toward Europe and Canada, whose environmental legislation remains consistent. At the same time, the dollar is falling and US Treasury yields are rising amid trade conflicts between the US and the EU.