Fund managers shifted from tech to financials in Q2 2026 amid rising rates and AI volatility.

In Q2 2026, fund managers rotated investments from technology stocks into financials, driven by rising interest rates that benefited banks and insurers. Tech stocks and REITs faced net selling due to sensitivity to rates and AI-related market volatility. Emerging market financials and FinTech firms like Nu Holdings and Credicorp attracted strong inflows for their growth potential. The outlook for financials in H2 2026 remains neutral overall, with selective opportunities in individual stocks.