Heading into 2026, many investors were looking for alternatives to the artificial intelligence (AI) trade. The problem has been that many diversified approaches that are performing well (e.g., emerging markets or small-cap stocks) lead back to tech.
One option for true sector rotation would be to invest in consumer staples. The Consumer Staples Select Sector SPDR Fund (NYSEARCA: XLP) is up about 10% year-to-date. That’s lower than the broader market, but it may also indicate that the broader rotation has further to go.