Hedge Funds Pivot from "All-In AI": US Stock Capital Shifts to Healthcare, Finance, and Energy

The July turmoil in AI trading marked a watershed moment, with Goldman Sachs reporting that hedge funds' VIP holdings underperformed the S&P 500 equal-weight index by 11 percentage points in a single month, the worst record in over 20 years. Against this backdrop, hedge funds have rotated from crowded AI positions into three major sectors—healthcare, financials, and energy—with overweight positions in financials rising to their highest level since before the financial crisis, energy holdings hitting a new high since 2015, and a decade-scale portfolio rebalancing potentially signaling accumulating relative return opportunities ahead.