Global investors have moved money from U.S. equities and into European and emerging markets assets, as concerns mount over U.S. fiscal policy, rising debt and the risk that trade tariffs will trigger a recession.

Equity mutual funds and exchange-traded funds, or ETFs, domiciled in the United States saw outflows of $24.7 billion in May, the largest in a year, data from LSEG Lipper showed.

By contrast, European funds attracted $21 billion in May, lifting year-to-date inflows to $82.5 billion, the highest in four years.

Data for 292 emerging market equity ETFs showed inflows of $3.6 billion last month, bringing total inflows this year to $11.1 billion.

Analysts said the dollar’s weakness and the selloff in U.S. Treasury bonds have eroded the safe-haven appeal of U.S. assets, driving capital into markets with appreciating currencies.

European markets have outperformed U.S. peers this year, helped by lower interest rates and optimism over Germany’s 1-trillion-euro stimulus plan. The European Central Bank cut interest rates for the eighth time in a year last week in an effort to support the economy, even as it warned of rising trade risks with the United States.

Michael Field, chief European market strategist at Morningstar, said the shift from the United States to Europe was initially driven by valuations but increasingly has been fueled by a change in investor sentiment.

"With investors rattled by the U.S. administration's actions and worried about the potential drag on equity markets, this may mark the start of a medium-term trend."

Since the start of the year, the MSCI United States index has gained 2.7%, while MSCI Europe has risen about 20% and MSCI Asia Pacific is up 10%.

Emerging market equity funds have also attracted money flows because of improving fundamentals, with Latin America seen as a safe option as trade and military conflicts elsewhere make investors seek more stable regions.

Asian economies are increasingly driven by domestic consumption.

Manish Raychaudhuri, founder and CEO of Emmer Capital Partners Ltd, said lower debt and stronger growth made Asian equities better positioned to benefit from U.S. capital outflows compared with European ones.

"While Italy, France and the UK face rising debt burdens, many Asian economies carry lighter fiscal loads, keeping bond yields stable and investor confidence intact."

The forward 12-month price-to-earnings ratio for MSCI U.S. stood at 20.4, compared with 13.5 for MSCI Europe and 14.2 for MSCI Asia Pacific.