Global Markets Daily A Floor Under Foreign Flows Into US Credit

Economics Research 15 September 2026 | 9:07AM EDT

Global Markets Daily: A Floor Under Foreign Flows Into US Credit

n The rise in global bond yields has caused some market participants to question Amanda Lynam, CPA | whether the appetite of foreign investors for US corporate credit will wane. This Goldman Sachs & Co. LLC is relevant as foreign investors are meaningful participants in the US corporate credit market, owning roughly 29% of the outstanding bonds according to Federal Reserve Board data. n The past few years have highlighted robust demand for US credit, and that trend has continued into 2026 according to the most recent data from the US Treasury. Through the end of June, year-to-date net foreign purchases of US corporate bonds totaled $251 billion. This leaves 2026 on pace to rival 2025’s annual record of $392 billion. n Leaving the custodial nuances of the TIC data aside, we find that European investors have represented the largest share of net foreign purchases of US credit in recent years, at 52%. Asia has generated 21%, and the Caribbean (which includes institutions domiciled in tax havens) accounted for 17%. n Flows from Japanese investors have been closely monitored by market participants, given policymakers’ recent comments regarding potential ways to increase domestic purchases of Japanese assets. As it relates to foreign investments, the Bank of Japan’s most recent Financial System Report highlighted an increased appetite for CLOs and alternative assets (such as private equity), and decreased holdings of IG and HY bonds. While there may be some scope for a further reduction in IG and HY bonds, we expect this size to be manageable in the context of the broader market. n USD hedging costs for European and Japanese investors have declined in 2026 and remain well below the 2022-2023 peaks. This should also support foreign demand for US credit, on the margin. That said, we do not view hedging costs as the key allocation consideration and believe macroeconomic activity, corporate profits, and credit fundamentals are more important. For foreign investors looking to take exposure to corporate credit risk, there are also few alternatives to the size and depth of the US market. As a result, we continue to expect a floor to remain under foreign purchases of US-domiciled credit, and view a broader repatriation of flows as unlikely.

Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to

Goldman Sachs Global Markets Daily

A Floor Under Foreign Flows Into US Credit

The rise in global bond yields has caused some market participants to question whether the appetite of foreign investors for US corporate credit will wane. This is relevant as foreign investors are meaningful participants in the US corporate credit market, owning roughly 29% of the outstanding bonds according to Federal Reserve Board data (Exhibit 1).

Exhibit 1: Foreign investors own nearly one-third of US corporate credit Ownership of the US corporate credit market, by investor type

60% Insurance companies Banks and credit unions 50% Other financial companies Households and nonprofits 40% Mutual Funds and ETFs Rest of World 30%

Source: Federal Reserve Board, Goldman Sachs Global Investment Research

The past few years have highlighted robust demand for US credit, and that trend has continued into 2026 according to the most recent data from the US Treasury. Through the end of June, year-to-date net foreign purchases of US corporate bonds totaled $251 billion. This leaves 2026 on pace to rival 2025’s annual record of $392 billion (Exhibit 2). This is notable as the foreign appetite for US credit has persisted despite a range of headwinds in recent years, including fluctuations in the strength of the dollar and the cost of hedging.