As a general rule, I don’t recommendblindlyfollowing institutional investors.
After all, their incentives are different from yours. They manage quarterly performance pressure. They answer to boards and beneficiaries. They navigate regulatory frameworks most of us never think about.
When pension funds, sovereign wealth funds and global asset managers start moving in the same direction,I pay attention– not because they’re always right, but because they control enough capital that their decisions createtrends.
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And right now, many of them are reducing exposure to the U.S. dollar.
According to a recent Bank of America global fund manager survey reported byFinancial times, institutional investors have moved to theirmost bearish positionon the dollar in over a decade. The worst reading since 2012 (when they started collecting data). In the chart below, “FX” is an abbreviation for forex which itself is an abbreviation for “foreign currency.”
Do they have a case? Well, theDollar Indexhas weakened meaningfully from prior highs, down 9% in 2025 and another 1.3% so far this year.
As a result, these fund managers, so-called “real money investors” like pension funds and insurance companies, want to protect against further dollar weakness.
Here’s why I take note. That’s notspeculation– we aren’t talking about a bunch of hot-money, performance-chasing hedge funds. That’sinstitutionsadjusting their risk exposure because they expectfurtherdollar decline.
The real question is, why would they expect this trend to continue?
Source: SGT Report
