How Middle East turmoil will impact the ongoing market sector rotation

• The market has experienced a 'big mix shift' from 'asset light' sectors (technology, communications, consumer discretionary) to 'asset heavy' sectors (basic materials, industrials, energies) since October.
• This 'asset heavy' rotation is expected to continue, with these sectors currently outperforming 'asset light' plays by approximately 15 points.
• The trend is supported by long-dated cycles including data center build-out and manufacturing onshoring.
• The fourth year of the bull market is seen as an opportunity for lower-risk entry into value asset classes.

The discussion focuses on the ongoing market sector rotation, highlighting a significant shift since last October from 'asset light' sectors like technology to 'asset heavy' sectors such as basic materials, industrials, and energy. This trend is expected to continue despite current geopolitical volatility, driven by long-term factors like data center build-outs and manufacturing onshoring.