Foreigners hold a significant amount of US stocks and fixed income, and the composition of their holdings has changed dramatically since the financial crisis, see chart below.
Today, 58% of US financial assets held by foreigners are equities. In 2010, 33% of financial assets held by foreigners were equities.
For corporate credit, the share has declined from 15% to 8%.
The bottom line is that foreigners are significantly overweight US equities and significantly underweight US credit.
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