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[The Hedging Wave Reveals a "Crowded Trade," with Wall Street Bullish and the US Dollar Bearish] ⑴ Despite recent market concerns about a weakening US dollar, many overseas investors appear to be adopting a "crowded trade" strategy: bullish on US stocks while hedging against downside risks to the US dollar. Data shows that over 80% of funds flowing into US stocks this year have been currency hedged, and approximately 50% of funds flowing into US Treasuries have also been hedged. This means that nearly two-thirds of overseas funds flowing into US assets have included currency risk protection. ⑵ This phenomenon appears to deviate from the "de-dollarization" trend previously predicted by some market participants. If de-dollarization were to occur, it would typically be accompanied by a decline in the attractiveness of US dollar assets. However, major US stock indices are currently hitting record highs, and even long-term Treasury bonds are performing strongly. This suggests that while investors may be cautious about the outlook for the US dollar, the resilience and potential returns of US assets, particularly the strong growth in the technology sector, continue to attract global capital. ⑶ The logic behind this move is that investors prefer to lock in losses from a declining US dollar while continuing to enjoy the potential gains of US assets. Historically, investors have been less inclined to hedge against dollar risks due to concerns that a sharp correction in the U.S. stock market would often be accompanied by risk aversion, pushing up the dollar. However, recent market turmoil, such as the volatility caused by the "Liberation Day" tariff rhetoric, may have changed this traditional view. Investors seem to believe that even if U.S. assets perform well, they are unwilling to bear the accompanying exchange rate fluctuations. (4) Although the market is generally bearish on the U.S. dollar, for reasons including the possibility that the Federal Reserve may soon cut interest rates while most central banks are nearing the end of their rate hike cycle, as well as concerns about the U.S. fiscal situation, the appeal of U.S. assets remains undiminished. In particular, since April 8, U.S. stocks, especially technology stocks, have shown an astonishing recovery momentum. Some institutional analysts pointed out that overseas investors tend to hold U.S. assets for the long term, valuing their growth potential, corporate governance, and opportunities in emerging fields such as artificial intelligence (AI). This "bullish on Wall Street, bearish on the dollar" strategy reflects that in the current environment, investors favor the U.S. market when seeking profit opportunities globally.