- Confidence in US long-term potential rises after two quarters of decline
- Magnificent 7 stocks see reduced retail investor interest
- Majority (83%) of investors trust USD as global reserve currency
Wednesday 10th September 2025 – Retail investors are regaining confidence in the US market’s long-term potential after two quarters of decline and have increased their exposure, according to the latest quarterly Retail Investor Beat from trading and investing platform eToro.
The research, which surveyed 10,000 retail investors across 12 countries, reveals that 38% now view the US as the region with the strongest long-term return potential, a 12% increase from the previous quarter. This reverses the trend of consecutive declines of 9% in Q1 and 17% in Q2. This confidence is also reflected in retail investors’ portfolios. 43% now have exposure to the US market, an 8% increase from the previous quarter and a record high since the start of eToro’s Retail Investor Beat in Q1 2023.
Commenting on the data, eToro’s Global Market Strategist Lale Akoner, said: “Earlier this year, heightened concerns around political instability and macroeconomic uncertainty in the US prompted retail investors to diversify more aggressively into Europe and emerging markets, often scaling back US exposure.
“Now, as confidence in the resilience of the US economy improves, we’re seeing a reversal of that trend. Portfolios are once again tilting back toward the US, reflecting recognition that, despite global diversification, the American market remains the cornerstone of global investing. Retail investors are effectively balancing diversification with a clear acknowledgment that long-term growth opportunities are still heavily anchored in the US.”
Increasing number of investors reduce exposure to Magnificent 7
When asked how they believe the so-called ‘Magnificent 7’ (Amazon, Apple, Microsoft, Meta, Tesla, Nvidia and Alphabet) will perform as a group in 2025, retail investors expressed a measured outlook. 13% expect these stocks to significantly outperform the market, while 33% believe they will only slightly outperform.
The data revealed that the number of investors planning to reduce their investments has increased marginally across all the ‘Magnificent 7’ stocks compared to a year ago – Meta, Apple, Nvidia and Tesla each saw a 2 percentage point increase, while the remaining firms experienced a rise of 1 percentage point. Retail investors have also slightly decreased their exposure to all of these major US tech stocks. Notably, the number of investors who aren’t invested in or don’t plan to invest in Tesla increased by 6 percentage points. Only Meta, Alphabet and Nvidia experienced a marginal rise in the proportion of investors planning to increase their investments.
Lale Akoner added: “The so-called ‘Magnificent 7’ have dominated markets in recent years, but rising concentration risk is prompting investors to reassess. The latest data show retail investors are trimming exposure, not because they doubt the long-term potential of these companies, but because overreliance on a handful of tech giants leaves portfolios vulnerable in a volatile environment.
“This shift signals a more disciplined approach: investors are acknowledging the Mag 7’s strength while actively rebalancing to improve diversification. It reflects a maturing mindset among retail investors – moving from chasing performance to managing risk more strategically.”
Year on year changes in retail investor sentiment towards Mag 7 (Q3 2024 vs Q3 2025)
USD remains unchallenged as global reserve currency
Whilst retail investors continue to prepare for a potential long-term weakening of the USD, with 50% having adjusted or planning to adjust their portfolios (up from 48% in the previous quarter), the majority (83%) have confidence in the US dollar remaining the global reserve currency for the next 10 years, whether they believe the dollar will weaken (33%), strengthen (22%) or remain stable (28%).
Only 7% of retail investors believe the US dollar will lose its global reserve status within the next decade. Of those 25% back bitcoin, the Chinese yuan, or the euro respectively, followed by gold (23%) and central bank digital currencies (16%).
Lale Akoner commented: “The US dollar has been the world’s primary reserve currency for over 70 years. Its dominance has persisted through various economic upheavals, including the collapse of the Bretton Woods system and the 2008 global financial crisis. Despite the USD seeing a decline of around 9% this year, driven mainly by Washington’s fiscal trajectory, retail investors still firmly believe in the USD’s pivotal role as a global reserve currency. At the same time, they are adjusting strategies to hedge against volatility and protect long-term returns.”
Global recession fears ease
The latest Retail Investor Beat reveals that recession fears are easing. While the global economy and a potential recession remain retail investors’ top perceived threat to their portfolio, concern has fallen from 26% in Q2 to levels seen a year ago (23%). Inflation remains in second place at 19%.
In contrast, 14% of investors now see their home economy as the biggest risk, up from 11% last quarter. Taking a country by country view, US investors are the most concerned (28%), followed by the UK (20%), Australia (17%) and France (15%), while Germany, Spain, and Italy remain below the average at 12% each.
Lale Akoner added: “Renewed confidence in the US market, a cornerstone of global financial stability, helps explain why fewer investors now view the global economy as the biggest risk to portfolios. Yet this optimism doesn’t extend to the domestic picture. US investors remain concerned about their own economy, reflecting proximity to political and policy decisions that amplify perceptions of risk.
“Inflation, meanwhile, remains a key concern, but has stabilised. This suggests retail investors are adjusting to a higher-for-longer environment and shifting their focus from systemic global shocks to local economic dynamics. The overall mood is cautious but increasingly pragmatic.”
ENDS
Notes to editors
About this report
The latest Retail Investor Beat was based on a survey of 110,000 retail investors across 132 countries and 3 continents. The following countries had 1,000 respondents: UK, US, Germany, France, Australia, Singapore, Italy and Spain. The following countries had 600 respondents: Netherlands, Denmark, Poland, Romania, and the Czech Republic.
The survey was conducted from 5 – 19 August and carried out by research company Opinium. Retail investors were defined as self-directed or advised and had to hold at least one investment product including shares, bonds, funds, investment ISAs or equivalent. They did not need to be eToro users.
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