Market Rotation and Sector Performance - The market has seen a rotation from AI-heavy stocks, particularly the Magnificent Seven, into defensive sectors such as energy, materials, and consumer staples, which have gained over 12%, 8%, and 6% respectively [3] - Equal-weighted ETFs have outperformed market cap-weighted counterparts as tech and communication services sectors have struggled, with gains of only 1.04% and losses of 0.91% respectively [3] Institutional Investment Trends - Institutional buying for the Vanguard S&P 500 ETF (VOO) has decreased significantly from $72 billion in Q4 2024 to $7.51 billion in Q4 2025, marking a nearly 90% year-over-year decline [4] - Institutional selling has also slowed from $7.24 billion to $588 million, reflecting a nearly 92% year-over-year decrease [4] Earnings Season and Future Outlook - With Q4 2025 earnings season underway, there is potential for a rebound in mega-cap companies, raising questions about the sustainability of equal-weighted ETFs' outperformance [4] - Tech stocks have shown signs of recovery leading up to the earnings reports of the Magnificent Seven, yet equal-weighted funds continue to outperform weighted index funds by 100 basis points [5] Concentration Risk and Market Sentiment - The lack of diversification in portfolios has led to concentration risk, with a significant portion of investments concentrated in specific sectors [4] - The underperformance of the Magnificent Seven has been noted, and until their high capital expenditures translate into increased earnings, investors may continue to favor ETFs with more attractive weightings [7]