US equity sector rotation is ongoing and attracting fresh flows. Net fund flows to US equities remain negative and positioning models sit at the 40th percentile, but rising retail and institutional sentiment is supportive for large caps over the medium term. Rotation and liquidation continue between AI-vulnerable names and AI-core stocks; the shift from semis into software has slowed. Healthcare has emerged as the primary recipient of new demand—hedge fund exposure to US healthcare has not meani

US equity sector rotation is ongoing and attracting fresh flows. Net fund flows to US equities remain negative and positioning models sit at the 40th percentile, but rising retail and institutional sentiment is supportive for large caps over the medium term. Rotation and liquidation continue between AI-vulnerable names and AI-core stocks; the shift from semis into software has slowed. Healthcare has emerged as the primary recipient of new demand—hedge fund exposure to US healthcare has not meaningfully recovered while healthcare ETFs show persistent inflows, leaving room for further improvement; European healthcare is also favored into quarter-end as hedge fund sentiment turns positive. Retailers are under pressure with hedge funds reinitiating shorts on global brand names. Metals and mining have rallied over the past month but positioning is not yet crowded. European banks have seen heavy hedge fund selling. JPMorgan Aug. 21 report