JUN · ISSUE 25 · June 18, 2026
ROTATIONThe trade of the year is over
Half semis, half energy: +49% on the year. The Iran deal closed the play, and money is starting to rotate into the forgotten.
TRADE OF THE YEAR
+49%
semis + energy YTD
THE TURN
ROTATION
after the Iran deal
DESTINATION
VALUE + RoW
the cheap and forgotten
THE NUMBER
+49%
↗ return of the barbell trade this year
Buying half semiconductors and half energy was 2026's winning trade. With the Iran deal, Nomura's desk warns: money is rotating now, out of the crowd and into cyclicals, value, emerging markets and the rest of the world.
NUMBER
ZOOM IN+49%
+49%
▲ semis + energy so far in 2026
When a trade wins this much, it runs out of new buyers. And with no new buyers, the only thing left is to sell.
That is what the year's star trade returned. The problem with a trade that works this well is that, in the end, everyone is already in it.
- YTD
- — Year To Date: return accumulated since January 1.
- CROWDED TRADE
- — A trade nearly everyone is already positioned in.
STRATEGY
RULE OF THE DAYDon't stand in front of the train
“Money doesn't announce when it changes sides: first it rotates, and only then do the headlines explain it.”
When a rotation starts with force, fighting it is expensive. Better to understand where money is heading than to resist it.
- MOMENTUM
- — Buying what is rising most; it suffers when the wind turns.
- CYCLICALS
- — Companies that earn more when the economy speeds up (industry, materials).
- EMERGING MARKETS
- — Developing economies' markets (China, India, Brazil).
THE TURN
ILLUSTRATIVEWhere money leaves and where it enters
Illustrative flow direction: the rotation punishes concentration and rewards diversification.
The direction of the rotation: out of the expensive and crowded, into the cheap and forgotten.
- FLOW
- — The direction money moves between assets.
- MAG-7
- — The 7 largest tech names that dominate the index.
HEAD TO HEAD
WHERE YOU STANDThe crowded trade versus the forgotten
THE CROWDED TRADE
What won until today
- Semis and energy: +49% on the year, nearly everyone positioned.
- Megacaps and momentum: expensive and reliant on low rates.
- The Iran deal pulled the engine out of the energy leg.
THE FORGOTTEN
Where money is looking
- Value and cyclicals: cheap and left behind for months.
- Emerging markets (China) and the rest of the world ex-US.
- Metals like silver, via leveraged option structures.
The rotation pits the year's winning play against the markets that have gone months without inflows.
- MEGACAP
- — A giant-capitalization company (hundreds of billions).
- EX-US
- — Markets outside the United States (Europe, Asia, emerging).
THE NEW BASKET
ILLUSTRATIVEWhere the money is rotating to
Cheap and lagging
Bullish call spreads
Europe and Asia
1×2 structures
Illustrative weights: this is a short-term rotation. Inflation and gold come back later, not now.
Illustrative breakdown of the basket the short-term rotation points toward.
- CALL SPREAD
- — An option structure that bets on gains with limited risk.
- 1×2
- — A structure that buys one option and sells two to cheapen the bet.
WATCHLIST
6 KEY ETFsThe ETFs that map the rotation
| RSP | 185 | ▲ +0.6% | Equal-weight S&P: 'the other 490'. Rises if breadth improves. |
| VTV | 175 | ▲ +0.8% | US value: the cheap names left behind for months. |
| MCHI | 58 | ▲ +1.9% | China: the destination Nomura's desk cites most. |
| VXUS | 70 | ▲ +0.7% | Rest of the world ex-US: Europe and Asia off the radar. |
| SOXX | 292 | ▼ -2.1% | Semis: the leg the money is leaving in the rotation. |
| XLE | 92 | ▼ -1.5% | Energy: loses its engine with crude at $74 after the deal. |
Each tells one side of the story: where money leaves and where it enters. Prices approximate.
- EQUAL-WEIGHT
- — An index where every stock weighs the same, not by size.
- BREADTH
- — How many stocks actually rise, not just the big ones.
- ETF
- — A listed basket that tracks an index or sector.
CLOSE
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- ROTATION
- — Money leaving some assets and entering others.
- VALUE
- — Cheap, solid stocks versus expensive growth names.